Trust Funds
Which of the following is the correct treatment of interest earned on an Alabama broker's trust account?
AThe interest belongs to the broker as compensation
BThe interest must be paid to the state of Alabama
CThe interest belongs to the party whose funds are held, unless otherwise agreed✓ Correct
DThe interest must be donated to charity
Explanation
Interest earned on trust account funds generally belongs to the party whose funds are held in the account, unless the parties have agreed otherwise or the account is an IOLTA account.
Related Alabama Trust Funds Questions
- In Alabama, a qualifying broker who manages property for owners must maintain:
- If a buyer's offer is accepted by the seller and the buyer's check for earnest money is returned by the bank as NSF (non-sufficient funds), the broker should:
- 'Conversion' of trust funds occurs when a broker:
- An Alabama broker who fails to maintain proper trust account records may be subject to which penalty by AREC?
- A buyer and seller disagree about who is entitled to the earnest money after a contract falls through. What should the Alabama broker do?
- An Alabama broker who knowingly issues a check from the trust account with insufficient funds to cover it may face:
- A broker may disburse funds from a trust account based on:
- If a buyer's check bounces after being deposited into the trust account, the broker should NOT:
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