Agency and License Law Practice Question
Question
A supervising broker is reviewing a transaction file for the Michigan Real Estate Salesperson Exam involving disciplinary grounds and seller disclosure practice. Which statement is the best answer? (Item 196)
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. The affiliated licensee may handle the matter independently without broker responsibility.
- D. Recognize fraud, misrepresentation, trust fund violations, and unlicensed activity as discipline risks in a way that fits Michigan exam practice.
Correct Answer
D. Recognize fraud, misrepresentation, trust fund violations, and unlicensed activity as discipline risks in a way that fits Michigan exam practice.
Explanation
The correct answer is D because disciplinary grounds requires candidates to recognize fraud, misrepresentation, trust fund violations, and unlicensed activity as discipline risks. The Michigan 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: hard
- Domain: Agency and License Law
- Objective: disciplinary grounds