CA Real Estate License Exam 2025: Detailed Explanations (Q&A 218)

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CA Real Estate License Exam 2025: Detailed Explanations (Q&A )

Question 218: An agent, Broker Brooks, fails to follow the instructions of his principal, Owner Olivia. Brooks is:
A. Liable to his principal for damages awarded by a court.
B. Subject to prosecution for a felony.
C. Subject to discipline by the Real Estate Commissioner.
D. Both A & C.
Correct answer is D. Both A & C.
An agent has a fiduciary duty to their principal, which includes following lawful instructions. If an agent fails to do so and causes financial harm to the principal, the principal can sue for damages. Real estate commissioners (or equivalent regulatory bodies) have the authority to discipline agents who violate real estate laws and regulations. Failing to follow a principal's instructions can be considered a breach of fiduciary duty and grounds for disciplinary action. Disciplinary action could include fines, suspension, or revocation of the agent's license. While failing to follow instructions is a breach of duty, it typically does not rise to the level of a felony unless it involves criminal intent, such as fraud or embezzlement.

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