A broker who maintains a property management business must:
Why Maintain separate trust accounts for property management funds and sales transaction funds, or keep them in one account with meticulous separate ledgers Is Correct
Answer B: Maintain separate trust accounts for property management funds and sales transaction funds, or keep them in one account with meticulous separate ledgers
Exam Tip: Trust Funds
Trust fund questions test the rules for handling client money. Know the deadlines for depositing trust funds, what constitutes commingling vs. conversion, and the penalties for violations.
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Related California Questions
- Under California law, a real estate broker who manages property for clients must maintain a separate trust account for client funds. Mixing client funds with the broker's personal funds is called:Agency
- Real estate trust funds must be deposited into the trust account within how many business days of receipt?DRE & Licensing
- Under California law, the maximum amount a broker may keep of their own funds in a trust account (to cover bank service charges) is:DRE & Licensing
- Which of the following records is a broker required to maintain for the trust fund account?Trust Funds
- A broker is required to maintain a columnar record (trust fund ledger) for the trust account. The purpose of this record is to:Trust Funds
- California regulations require that a broker maintain a 'trust fund bank account record' (journal). What does this record show?Trust Funds
- A property manager is responsible for a 50-unit apartment building. California law requires the manager to keep copies of all property management records for a minimum of:Property Management
- What records must a California broker maintain for their trust account?Trust Funds
Key Terms to Know
A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
EscrowA neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
Closing CostsFees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
ProrationThe division of ongoing property expenses (taxes, HOA dues, rents) between buyer and seller at closing based on their respective days of ownership.
State-Specific Concepts
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