Principles, Property, and Land Use Practice Question

Question

A supervising broker is reviewing a transaction file for the North Carolina Real Estate Broker Exam involving title insurance and provisional broker supervision. Which statement is most accurate for exam purposes? (Item 40)

Answer choices

1. A. The requirement matters only when the buyer obtains institutional financing.
2. B. The affiliated licensee may handle the matter independently without broker responsibility.
3. C. Local custom controls even when a statute, regulation, contract, or disclosure rule applies.
4. D. Recognize protection against covered title defects in a way that fits North Carolina exam practice.

Correct Answer

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

Explanation

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

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