Trust Funds
The DRE has the authority to audit a broker's trust account records:
AOnly if a formal complaint has been filed
BOnly with a court order
CAt any time, with or without prior notice, and without a complaint✓ Correct
DOnce every five years as part of the license renewal process
Explanation
The DRE has broad authority to examine and audit a broker's trust account records at any time and without advance notice. This allows the DRE to protect consumers by ensuring trust funds are properly handled, even in the absence of a complaint.
Related California Trust Funds Questions
- Which of the following is considered 'commingling' of trust funds?
- A salesperson collects an earnest money deposit from a buyer. What must the salesperson do with these funds?
- Can a property management broker combine the security deposits for multiple tenants in a single trust account?
- What must a broker do when they receive a buyer's earnest money deposit check with instructions to hold it uncashed pending acceptance?
- Under California law, trust fund records must be retained for a minimum of:
- A broker receives a commission payment directly from the seller at closing. This money should be deposited into:
- What is 'conversion' of trust funds?
- A property manager collects security deposits from tenants. Under California law, security deposits:
Practice More California Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free California Quiz →