An Alabama broker receives security deposits from tenants managed under a property management agreement. These funds must be:
Why Held in a trust account separate from operating funds Is Correct
Answer B: Held in a trust account separate from operating 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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Related Alabama Questions
- In Alabama, the term for a broker's obligation to keep client funds separate from personal or business operating funds is:Trust Funds
- In Alabama, who is ultimately responsible for ensuring that client funds are properly maintained in the trust account?Trust Funds
- Alabama law requires that a company's real estate trust account be maintained:Alabama License Law
- A property manager receives a security deposit from a new tenant in Alabama. The deposit must be:Property Management
- 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, a broker's trust account records must be maintained for a minimum of:Alabama License Law
- An Alabama property manager who receives a commission for referring a tenant to a specific moving company must:Property Management
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.
EscrowA neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
State-Specific Concepts
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