Trust Funds
A broker who maintains a property management business must:
AKeep all rental deposits and rents in the same trust account as sales transaction funds
BMaintain separate trust accounts for property management funds and sales transaction funds, or keep them in one account with meticulous separate ledgers✓ Correct
CPlace all property management rents in the broker's operating account
DForward all rents to the DRE for safekeeping
Explanation
California regulations allow a broker to maintain one or more trust accounts. While not strictly required to have separate accounts for property management and sales, many brokers keep them separate to avoid confusion. Regardless, every beneficiary's funds must be tracked in separate ledger records.
Related California Trust Funds Questions
- Under California law, a real estate broker must deposit trust funds received into the trust account no later than:
- If a buyer's check for earnest money is made payable to the listing broker, and the buyer instructs the broker to hold the check uncashed until the offer is accepted, the broker should:
- Interest earned on funds held in a broker's trust account generally belongs to:
- A broker may keep a maximum of how much of the broker's own funds in the trust account without it being considered commingling?
- A broker receives an earnest money check made out to the seller. The buyer instructs the broker to hold the check uncashed until offer acceptance. The broker MUST:
- Which of the following is considered a trust fund under California law?
- A broker may maintain a personal (broker's) funds balance in the trust account of up to how much to cover bank service charges?
- How often must a broker reconcile the trust fund bank account balance with the total of all client ledger balances?
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