Contracts, Finance, and Transfer Practice Question
Question
A supervising broker is reviewing a transaction file for the New Jersey Real Estate Salesperson Exam involving prorations and attorney review awareness. Which answer best reduces risk? (Item 144)
Answer choices
- A. The issue can be ignored if the parties want to close quickly.
- B. The rule applies only to commercial transactions and never to residential transactions.
- C. Client funds may be mixed with business funds if the broker reconciles the account later.
- D. Allocate recurring expenses such as taxes, rent, interest, or assessments in a way that fits New Jersey exam practice.
Correct Answer
D. Allocate recurring expenses such as taxes, rent, interest, or assessments in a way that fits New Jersey exam practice.
Explanation
The correct answer is D because prorations requires candidates to allocate recurring expenses such as taxes, rent, interest, or assessments. The New Jersey 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