Trust Funds
A qualifying broker is responsible for the trust account actions of all licensees in their firm. This is an example of:
AVicarious liability✓ Correct
BDual agency
CSubagency
DErrors and omissions coverage
Explanation
Vicarious liability holds the qualifying broker legally responsible for the actions — including trust account mismanagement — of the salespersons and associate brokers operating under their supervision.
People Also Study
Related Alabama Questions
- In Alabama, a qualifying broker's trust account must be reconciled:Trust Funds
- Alabama regulations require brokers to maintain trust account records for at least:Trust Funds
- In Alabama, who is ultimately responsible for ensuring that client funds are properly maintained in the trust account?Trust Funds
- How long must Alabama brokers retain trust account records?Trust Funds
Key Terms to Know
Dual Agency
A situation where a single real estate agent or brokerage represents both the buyer and the seller in the same transaction.
AgencyA legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
EscrowA neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
Closing CostsFees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
State-Specific Concepts
Trust Account Rules
Study This Topic
Practice More Alabama Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Alabama Quiz →