An Alabama broker receives rental income on behalf of a property owner. These funds must be deposited into:
Why A trust account separate from the broker's funds Is Correct
Answer B: A trust account separate from the broker's funds
Exam Tip: Trust Funds
Trust fund questions test the rules for handling client money. Know the deadlines for depositing trust funds, what constitutes commingling vs. conversion, and the penalties for violations.
Key Trust Funds Terms in This Question
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- In Alabama, who is ultimately responsible for ensuring that client funds are properly maintained in the trust account?Trust Funds
- Which of the following is NOT an acceptable reason for a broker to withdraw funds from an Alabama trust account?Trust Funds
- Conversion of client funds in a trust account occurs when a broker:Trust Funds
- In Alabama, the term for a broker's obligation to keep client funds separate from personal or business operating funds is:Trust Funds
- Alabama law requires that a company's real estate trust account be maintained:Alabama License Law
- An Alabama appraiser uses the income approach to value a rental property. The key formula is:Property Valuation
- Which lease type provides the most predictable income for an Alabama property owner?Property Management
- In Alabama, a broker's trust account records must be maintained for a minimum of:Alabama License Law
Key Terms to Know
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
State-Specific Concepts
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