Trust Funds
Which of the following is NOT an acceptable reason for a broker to withdraw funds from an Alabama trust account?
ADisbursing earnest money to the seller at closing
BReturning earnest money to a buyer after contract cancellation
CPaying the broker's office rent✓ Correct
DPaying a commission after closing
Explanation
Trust account funds belong to clients and may only be disbursed for the benefit of the client or as instructed by the parties. Using trust funds to pay office expenses is commingling and is strictly prohibited.
Related Alabama Trust Funds Questions
- If AREC discovers that a broker has been consistently depositing personal funds into the trust account in excess of what is needed for bank fees, AREC would likely characterize this as:
- Conversion of client funds in a trust account occurs when a broker:
- A broker may disburse funds from a trust account based on:
- Which of the following would be considered an acceptable reason to withdraw funds from a trust account?
- If an Alabama broker has a dispute about the disbursement of earnest money and cannot resolve it with the parties, the broker should:
- When a broker receives a post-dated check as earnest money, the best practice is to:
- If a buyer's check bounces after being deposited into the trust account, the broker should NOT:
- If a broker fails to maintain proper trust account records, AREC may:
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