What records must a California broker maintain for their trust account?
Why A separate journal for each beneficiary and a columnar cash book, kept for 3 years, subject to DRE audit Is Correct
Answer B: A separate journal for each beneficiary and a columnar cash book, kept for 3 years, subject to DRE audit
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
- Which of the following records is a broker required to maintain for the trust fund account?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
- California regulations require that a broker maintain a 'trust fund bank account record' (journal). What does this record show?Trust Funds
- 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
- A broker acting as a property manager must maintain trust account records for how long?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.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
EscrowA neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
Closing CostsFees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
State-Specific Concepts
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