Which of the following is NOT a permissible disbursement from a broker's trust account?
Why Paying the broker's office rent from accumulated trust funds Is Correct
Answer C: Paying the broker's office rent from accumulated trust funds
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.
Key Trust Funds Terms in This Question
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- 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
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Key Terms to Know
A neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
State-Specific Concepts
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