Contracts, Finance, and Transfer Practice Question
Question
A property manager asks how a rule affects a rental property for the Michigan Real Estate Salesperson Exam involving prorations and agency and trust-money compliance. What should the licensee understand? (Item 108)
Answer choices
- A. The requirement matters only when the buyer obtains institutional financing.
- B. The affiliated licensee may handle the matter independently without broker responsibility.
- C. Local custom controls even when a statute, regulation, contract, or disclosure rule applies.
- D. Allocate recurring expenses such as taxes, rent, interest, or assessments in a way that fits Michigan exam practice.
Correct Answer
D. Allocate recurring expenses such as taxes, rent, interest, or assessments in a way that fits Michigan exam practice.
Explanation
The correct answer is D because prorations requires candidates to allocate recurring expenses such as taxes, rent, interest, or assessments. 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: Contracts, Finance, and Transfer
- Objective: prorations