Arizona License LawIntermediateArizona Exam
An Arizona real estate licensee who acts as a property manager must ensure that trust accounts used for security deposits are:
AHeld in the designated broker's personal checking or savings account as a matter of administrative convenience, provided the funds are not used for personal expenses
BMaintained in a federally insured financial institution in Arizona, separate from the broker's operating fundsCorrect
CInvested in short-term Treasury securities or money market instruments to earn interest for the benefit of the broker's operating account during the transaction period
DHeld directly by the property owner in the owner's personal account, since the property management agreement makes the owner the trustee of their own security deposit funds
Why Maintained in a federally insured financial institution in Arizona, separate from the broker's operating funds Is Correct
Answer B: Maintained in a federally insured financial institution in Arizona, separate from the broker's operating funds
Arizona law requires property management trust accounts to be maintained in a federally insured Arizona financial institution and kept completely separate from the broker's own funds (no commingling). Security deposits are client funds and must be protected accordingly.
Key Arizona License Law Terms in This Question
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Key Terms to Know
Lien
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
AgencyA legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
State-Specific Concepts
Trust Account Rules
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