Agency and License Law Practice Question
Question
A broker is correcting a new licensee’s misunderstanding for the Indiana Real Estate Broker Exam involving fiduciary disclosure and broker affiliation and supervision. What should the licensee understand? (Item 23)
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. Tell the client material information relevant to the representation 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. Tell the client material information relevant to the representation in a way that fits Indiana exam practice.
Explanation
The correct answer is C because fiduciary disclosure requires candidates to tell the client material information relevant to the representation. 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: fiduciary disclosure