Question
nnnnAn agent is putting both his funds from property management and his residential sales in the same trust account. This is okay if:
nnnnSelections
nnnnA. Broker has a real estate securities permit
nnnnB. A separate record is kept for each
nnnnC. It is less than $30,000 in the trust account
nnnnD. Broker has a fidelity bond to cover the maximum amount
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Answer: B
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5 Keys Summary
nnnn• Trust funds received by a broker, including residential sales deposits and property management rents, must be placed into a neutral escrow, delivered to the owner, or deposited into a broker’s trust account within three business days of receipt.
nnnn• The illegal act of commingling, which is mixing a client’s trust funds with the broker’s personal or general funds, is strictly prohibited and can lead to the suspension or revocation of a real estate license.
nnnn• A broker is permitted to use a single trust account to hold funds collected from different activities, such as property management and earnest money deposits from sales transactions.
nnnn• This practice is acceptable if and only if the broker maintains separate, meticulous records for each individual beneficiary or transaction within that single trust account.
nnnn• Maintaining these separate records allows the broker to perform a monthly reconciliation to ensure the trust account balance equals the total liability owed to all clients.
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