Agency and License Law Practice Question
Question
A supervising broker is reviewing a transaction file for the Indiana Real Estate Broker Exam involving trust money and state agency and disclosure practice. What should the licensee understand? (Item 47)
Answer choices
- A. The issue can be ignored if the parties want to close quickly.
- B. The rule applies only to commercial transactions and never to residential transactions.
- C. Handle client funds separately, promptly, and according to broker/state rules in a way that fits Indiana exam practice.
- D. Client funds may be mixed with business funds if the broker reconciles the account later.
Correct Answer
C. Handle client funds separately, promptly, and according to broker/state rules in a way that fits Indiana exam practice.
Explanation
The correct answer is C because trust money requires candidates to handle client funds separately, promptly, and according to broker/state rules. The Indiana reference keeps the scenario tied to state licensing practice, while the other options rely on unsafe assumptions about oral custom, escrow, client preference, independent licensee authority, or ignoring written duties.
Question details
- Difficulty: medium
- Domain: Agency and License Law
- Objective: trust money