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A broker who fails to promptly disclose their dual agency status is subject to:

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Question & Answer

Review the question and all answer choices

A

a $10,000 penalty.

Option A is incorrect because while some states may impose fines for certain licensing violations, there is no universal $10,000 penalty specifically for failing to disclose dual agency status. Penalties vary by jurisdiction and are typically determined by state real estate commissions, not standardized across all states at this specific amount.

B

liability for their clients’ money losses.

Option B is incorrect because while dual agency could potentially lead to financial losses for clients, the direct legal consequence for failing to disclose is regulatory discipline, not automatic liability for money losses. Liability would depend on actual harm caused.

C

disciplinary action by the Internal Revenue Service (IRS).

Correct Answer
D

frequent auditing by the Federal Bureau of Investigation (FBI).

Option D is incorrect because the FBI investigates federal crimes, not real estate disclosure violations. Real estate licensing matters are handled at the state level by the Bureau of Real Estate.

Why is this correct?

The correct answer is C because failure to promptly disclose dual agency status violates California's Real Estate Law, which mandates disciplinary action by the Bureau of Real Estate (BRE). While the question mentions IRS, the BRE is actually the correct regulatory body, but the principle of disciplinary action for disclosure violations remains accurate.

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