Leasing License Practice Exam

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What does the License Act provide for a licensee regarding client communication?

Advising clients of their rights
Providing a verbal agreement only
Advising customers in writing about the agency relationship
Offering a refund policy

The correct answer is: Advising customers in writing about the agency relationship

The License Act mandates that a licensee must communicate clearly and effectively with clients about the nature of the agency relationship. This includes the requirement to advise customers in writing about how the agency works and what responsibilities arise from it. Written communication helps ensure that clients fully understand their rights and obligations as part of the transaction process. This requirement to provide written information fosters transparency and trust, enabling clients to make informed decisions. Informative writing can cover aspects such as the duties of the agent, the client's rights, and any potential conflicts of interest, solidifying the legal framework that governs their relationship. While advising clients of their rights is essential, it should be done in conjunction with a clear explanation of the agency relationship, which includes written communication. Thus, simply providing a verbal agreement or a refund policy does not fulfill the comprehensive communication required by the License Act.