What is the purpose of a property management trust account reconciliation?
Why To verify that the trust account balance matches all individual client ledger balances Is Correct
Answer B: To verify that the trust account balance matches all individual client ledger balances
Exam Tip: Property Management
Property management questions cover landlord-tenant law, security deposits, and maintenance responsibilities. Know the differences between gross, net, and percentage leases.
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- A broker may maintain a personal (broker's) funds balance in the trust account of up to how much to cover bank service charges?Trust Funds
- How often must a broker reconcile the trust fund bank account balance with the total of all client ledger balances?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
- A DRE audit of a broker's trust account reveals that the balance of individual client ledgers is less than the total bank balance. This condition is called:Trust Funds
- 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
- 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
- A real estate licensee in California is found to have commingled client funds with their personal bank account. This violates:DRE & Licensing
- Real estate trust funds must be deposited into the trust account within how many business days of receipt?DRE & Licensing
Key Terms to Know
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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