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 statute of frauds and agency and trust-money compliance. Which statement is most accurate for exam purposes? (Item 38)
Answer choices
- A. The issue can be ignored if the parties want to close quickly.
- B. Recognize that many real estate agreements must be written to be enforceable in a way that fits Michigan exam practice.
- C. The rule applies only to commercial transactions and never to residential transactions.
- D. Client funds may be mixed with business funds if the broker reconciles the account later.
Correct Answer
B. Recognize that many real estate agreements must be written to be enforceable in a way that fits Michigan exam practice.
Explanation
The correct answer is B because statute of frauds requires candidates to recognize that many real estate agreements must be written to be enforceable. 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: medium
- Domain: Contracts, Finance, and Transfer
- Objective: statute of frauds