Contracts, Finance, and Transfer Practice Question
Question
A salesperson notices a possible compliance problem for the Indiana Real Estate Broker Exam involving prorations and Indiana Real Estate Commission. What should the licensee understand? (Item 18)
Answer choices
- A. Escrow or closing staff automatically assume all brokerage agency and disclosure duties.
- B. Allocate recurring expenses such as taxes, rent, interest, or assessments in a way that fits Indiana exam practice.
- C. The client’s preference eliminates the need to disclose known material facts.
- D. The party who complains first automatically receives the remedy requested.
Correct Answer
B. Allocate recurring expenses such as taxes, rent, interest, or assessments in a way that fits Indiana exam practice.
Explanation
The correct answer is B because prorations requires candidates to allocate recurring expenses such as taxes, rent, interest, or assessments. 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: Contracts, Finance, and Transfer
- Objective: prorations