Agency and License Law Practice Question
Question
A broker is correcting a new licensee’s misunderstanding for the Tennessee Affiliate Broker Exam involving trust money and Tennessee Real Estate Commission. Which response best applies the rule? (Item 11)
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. Handle client funds separately, promptly, and according to broker/state rules in a way that fits Tennessee exam practice.
- D. The requirement matters only when the buyer obtains institutional financing.
Correct Answer
C. Handle client funds separately, promptly, and according to broker/state rules in a way that fits Tennessee exam practice.
Explanation
The correct answer is C 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: medium
- Domain: Agency and License Law
- Objective: trust money