Trust Funds
Which of the following is NOT a permissible use of an Alabama broker's trust account?
AHolding earnest money deposits
BHolding security deposits for managed properties
CCovering the broker's business operating expenses temporarily✓ Correct
DHolding funds from rental collections
Explanation
Trust accounts must hold only client funds — never broker funds. Using trust account money for the broker's operating expenses, even temporarily, constitutes commingling or conversion, both serious violations of Alabama license law.
Related Alabama Trust Funds Questions
- Which of the following is permissible in an Alabama broker's trust account?
- A broker receives an earnest money check from a buyer but the seller has not yet accepted the offer. The broker should:
- Commingling in real estate refers to:
- In Alabama, a real estate broker's trust (escrow) account must be:
- AREC has the authority to audit a broker's trust account:
- A broker who holds earnest money from a buyer and the deal falls through due to a contract dispute must:
- A property manager collects monthly rents of $50,000 on behalf of property owners. These funds must be:
- Interest earned on Alabama broker trust accounts typically:
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