Trust Funds
A broker maintains a trust account with a balance of $50,000 representing multiple clients' earnest money deposits. The broker should:
AKeep a detailed ledger showing each client's deposit and balance separately✓ Correct
BKeep a single total balance and divide equally at closing
CWithdraw the funds monthly and redeposit them
DTransfer the funds to a CD for higher interest
Explanation
Alabama requires brokers to maintain individual ledger records for each client's funds in the trust account, even if all deposits are held in a single pooled account. This allows accurate accounting and auditing of each client's money.
Related Alabama Trust Funds Questions
- What is an IOLTA account in the context of real estate trust accounts?
- Which of the following would be considered a violation of Alabama trust account rules?
- An Alabama broker's trust account is subject to AREC examination:
- An Alabama broker receives rental income on behalf of a property owner. These funds must be deposited into:
- If a buyer's offer is accepted by the seller and the buyer's check for earnest money is returned by the bank as NSF (non-sufficient funds), the broker should:
- Which of the following is permissible in an Alabama broker's trust account?
- A property management company collects first and last month's rent plus a security deposit from a new tenant. Which portion(s) must go into a trust account?
- Which of the following BEST describes 'commingling' of funds?
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