Trust Funds
In Alabama, an earnest money deposit held by a real estate broker must be:
ADeposited in the broker's personal account for safekeeping
BPlaced in a separate escrow/trust account✓ Correct
CTurned over to the seller immediately
DHeld in cash until closing
Explanation
Alabama license law requires that earnest money and other client funds be deposited in a separate escrow or trust account, completely segregated from the broker's personal and operating funds to prevent commingling.
Related Alabama Trust Funds Questions
- Conversion of trust funds occurs when a broker:
- Under AREC rules, how quickly must a broker deposit earnest money or other trust funds after receipt?
- If a buyer's check bounces after being deposited into the trust account, the broker should NOT:
- Which of the following is permissible in an Alabama broker's trust account?
- In Alabama, who is ultimately responsible for ensuring that client funds are properly maintained in the trust account?
- Interest earned on Alabama broker trust accounts typically:
- Alabama regulations require brokers to maintain trust account records for at least:
- AREC has the authority to audit a broker's trust account:
Practice More Alabama Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Alabama Quiz →