Agency and License Law Practice Question
Question
A buyer asks a licensee for an exam-focused explanation for the Massachusetts Real Estate Salesperson Exam involving trust money and Massachusetts Board of Registration. Which statement is most accurate for exam purposes? (Item 119)
Answer choices
- A. Local custom controls even when a statute, regulation, contract, or disclosure rule applies.
- B. The requirement matters only when the buyer obtains institutional financing.
- C. Handle client funds separately, promptly, and according to broker/state rules in a way that fits Massachusetts exam practice.
- D. The affiliated licensee may handle the matter independently without broker responsibility.
Correct Answer
C. Handle client funds separately, promptly, and according to broker/state rules in a way that fits Massachusetts 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 Massachusetts 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