Principles, Property, and Land Use Practice Question

Question

A client asks whether a fact should be disclosed for the Michigan Real Estate Salesperson Exam involving title insurance and agency and trust-money compliance. Which statement is most accurate for exam purposes? (Item 180)

Answer choices

1. A. The issue can be ignored if the parties want to close quickly.
2. B. The rule applies only to commercial transactions and never to residential transactions.
3. C. Client funds may be mixed with business funds if the broker reconciles the account later.
4. D. Recognize protection against covered title defects in a way that fits Michigan exam practice.

Correct Answer

D. Recognize protection against covered title defects in a way that fits Michigan exam practice.

Explanation

The correct answer is D because title insurance requires candidates to recognize protection against covered title defects. 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: Principles, Property, and Land Use
• Objective: title insurance

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