Contracts, Finance, and Transfer Practice Question
Question
A property manager asks how a rule affects a rental property for the North Carolina Real Estate Broker Exam involving prorations and North Carolina Real Estate Commission. Which response best applies the rule? (Item 72)
Answer choices
- A. The rule applies only to commercial transactions and never to residential transactions.
- B. Client funds may be mixed with business funds if the broker reconciles the account later.
- C. The issue can be ignored if the parties want to close quickly.
- D. Allocate recurring expenses such as taxes, rent, interest, or assessments in a way that fits North Carolina exam practice.
Correct Answer
D. Allocate recurring expenses such as taxes, rent, interest, or assessments in a way that fits North Carolina exam practice.
Explanation
The correct answer is D because prorations requires candidates to allocate recurring expenses such as taxes, rent, interest, or assessments. The North Carolina 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