Trust Funds
A broker who violates trust fund regulations is subject to which of the following penalties?
AA warning letter only for a first offense
BDRE license suspension or revocation, civil liability, and possible criminal charges✓ Correct
CA fine of $500 maximum per violation
DMandatory continuing education only
Explanation
Trust fund violations are among the most serious DRE infractions. Depending on the nature and severity, penalties can include license suspension or revocation, civil liability to harmed parties, and criminal prosecution for theft or embezzlement.
Related California Trust Funds Questions
- What is a 'neutral escrow' and when is it used for trust funds?
- A broker receives a $10,000 earnest money deposit in cash from a buyer. The broker must:
- The DRE has the authority to audit a broker's trust account records:
- A California real estate broker's trust account must be maintained at:
- Which California government agency has primary jurisdiction over the investigation of trust fund violations by real estate licensees?
- A buyer and seller have a dispute over who is entitled to an earnest money deposit after a transaction falls through. The broker should:
- If a buyer instructs the broker to hold their uncashed check until offer acceptance, the broker should:
- A broker places a client's $50,000 earnest money deposit into a money market account earning interest. The broker does NOT inform the client or credit the interest to the client. This is:
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