Contracts, Finance, and Transfer Practice Question
Question
A supervising broker is reviewing a transaction file for the Pennsylvania Real Estate Salesperson Exam involving prorations and Pennsylvania Real Estate Commission. Which response best applies the rule? (Item 72)
Answer choices
- A. The affiliated licensee may handle the matter independently without broker responsibility.
- B. Local custom controls even when a statute, regulation, contract, or disclosure rule applies.
- C. The requirement matters only when the buyer obtains institutional financing.
- D. Allocate recurring expenses such as taxes, rent, interest, or assessments in a way that fits Pennsylvania exam practice.
Correct Answer
D. Allocate recurring expenses such as taxes, rent, interest, or assessments in a way that fits Pennsylvania exam practice.
Explanation
The correct answer is D because prorations requires candidates to allocate recurring expenses such as taxes, rent, interest, or assessments. The Pennsylvania 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