Trust Funds
Which of the following trust account activities would constitute commingling?
ADepositing earnest money from two different clients in the same trust account
BPaying the broker's phone bill from the trust account✓ Correct
CDepositing the earnest money three business days after receipt
DMaintaining a separate ledger for each client
Explanation
Paying any business or personal expense from the trust account is commingling — it mixes client funds with operating funds. Multiple clients' earnest money can lawfully coexist in one pooled trust account, as long as separate ledger entries are maintained.
Related Alabama Trust Funds Questions
- A buyer and seller disagree about who is entitled to the earnest money after a contract falls through. What should the Alabama broker do?
- Which of the following is permissible in an Alabama broker's trust account?
- In Alabama, an earnest money deposit held by a real estate broker must be:
- 'Conversion' of trust funds occurs when a broker:
- If an Alabama broker has a dispute about the disbursement of earnest money and cannot resolve it with the parties, the broker should:
- An Alabama broker may make disbursements from the trust account based on:
- Which of the following BEST describes 'commingling' of funds?
- When a broker receives a post-dated check as earnest money, the best practice is to:
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