Trust Funds
Which of the following would be considered a violation of Alabama trust account rules?
AHolding earnest money in a federally insured account
BDepositing a buyer's earnest money check within 3 banking days
CPaying the broker's office utility bill from the trust account✓ Correct
DReturning a deposit to a buyer after a failed inspection contingency
Explanation
Paying operating expenses such as utility bills from the trust account constitutes commingling or conversion of trust funds, which is a serious violation of Alabama license law.
Related Alabama Trust Funds Questions
- In Alabama, the trust account ledger must reflect:
- After a real estate closing in Alabama, how quickly should trust funds be disbursed?
- A broker's trust account must be reconciled:
- If an Alabama broker has a dispute about the disbursement of earnest money and cannot resolve it with the parties, the broker should:
- A broker who uses earnest money from one transaction to fund a shortfall in another transaction's escrow is guilty of:
- A broker receives an earnest money check from a buyer but the seller has not yet accepted the offer. The broker should:
- An Alabama broker who fails to maintain proper trust account records may be subject to which penalty by AREC?
- In Alabama, an earnest money deposit held by a real estate broker must be:
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