Contracts, Finance, and Transfer Practice Question
Question
A client asks whether a fact should be disclosed for the Utah Real Estate Sales Agent Exam involving prorations and state forms and disclosure awareness. Which answer best reduces risk? (Item 54)
Answer choices
- A. The issue can be ignored if the parties want to close quickly.
- B. Allocate recurring expenses such as taxes, rent, interest, or assessments in a way that fits Utah exam practice.
- C. The rule applies only to commercial transactions and never to residential transactions.
- D. Client funds may be mixed with business funds if the broker reconciles the account later.
Correct Answer
B. Allocate recurring expenses such as taxes, rent, interest, or assessments in a way that fits Utah exam practice.
Explanation
The correct answer is B because prorations requires candidates to allocate recurring expenses such as taxes, rent, interest, or assessments. The Utah 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: Contracts, Finance, and Transfer
- Objective: prorations