What are 'trust funds' in California real estate practice?
Why Money or things of value received by a licensee on behalf of others that do not belong to the licensee and must be kept separate from the broker's personal funds Is Correct
Answer B: Money or things of value received by a licensee on behalf of others that do not belong to the licensee and must be kept separate from the broker's personal 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
- 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:Trust Funds
- A real estate licensee in California is found to have commingled client funds with their personal bank account. This violates:DRE & Licensing
- Under California law, a real estate broker must deposit trust funds received into the trust account no later than:Trust Funds
- Under California law, when must a broker deposit funds received from clients into the broker's trust account?Trust Funds
- Real estate trust funds must be deposited into the trust account within how many business days of receipt?DRE & Licensing
- 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 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
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.
AgencyA legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
Right of First RefusalA contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
State-Specific Concepts
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