Trust Funds
Interest earned on a real estate trust account in California generally:
ABelongs to the DRE for consumer protection programs
BMust be credited to the individual client whose funds generated the interest✓ Correct
CBelongs to the broker as compensation for managing the account
DMust be donated to a local escrow education fund
Explanation
Any interest earned on a client's trust funds belongs to that client, not the broker, unless the parties agree otherwise in writing. Brokers must credit interest to the appropriate beneficiary or keep trust funds in non-interest-bearing accounts unless client permission for other arrangements is obtained.
Related California Trust Funds Questions
- When may a broker withdraw funds from their trust account?
- Which of the following is considered 'commingling' of trust funds?
- Under California law, a real estate broker must deposit trust funds received into a neutral escrow or into the broker's trust fund account no later than:
- Which of the following is an example of a trust fund?
- A broker who is also a property manager collects rent on behalf of an owner. These rental proceeds are:
- Under California law, a real estate broker must deposit trust funds received into the trust account no later than:
- What is 'conversion' in the context of trust funds?
- 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:
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