Housing and Community Development (HCD) Practice Exam

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What obligation does a licensee have when accepting funds as a deposit?

Provide a receipt for the deposit
Notify the seller immediately
Complete a homeowner registration card
Not disclose the purpose of funds

The correct answer is: Provide a receipt for the deposit

When a licensee accepts funds as a deposit, providing a receipt for the deposit is a fundamental obligation. This action establishes a clear record of the transaction, which is vital for both legal and practical purposes. A receipt serves as proof of payment, indicating that the buyer has made a financial commitment toward the purchase of the property. This not only protects the interests of the buyer but also serves as documentation for the seller and any regulatory bodies, ensuring transparency in the transaction process. Issuing a receipt is also a best practice that fosters trust between the parties involved and aids in maintaining accurate financial records throughout the home purchase process. This practice aligns with ethical standards in the real estate profession, reinforcing the licensee's duty to handle all financial transactions responsibly. Other options, while relevant in different contexts, do not address the immediate obligation that arises when a deposit is accepted. For instance, notifying the seller is important, but it may not be the first step taken and does not provide the same level of assurance or documentation as providing a receipt.