Agency and License Law Practice Question
Question
A client asks whether a fact should be disclosed for the Tennessee Affiliate Broker Exam involving trust money and affiliate broker supervision. Which statement is most accurate for exam purposes? (Item 29)
Answer choices
- A. Handle client funds separately, promptly, and according to broker/state rules in a way that fits Tennessee exam practice.
- 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. The rule applies only to commercial transactions and never to residential transactions.
Correct Answer
A. Handle client funds separately, promptly, and according to broker/state rules in a way that fits Tennessee exam practice.
Explanation
The correct answer is A because trust money requires candidates to handle client funds separately, promptly, and according to broker/state rules. The Tennessee 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: easy
- Domain: Agency and License Law
- Objective: trust money