Colorado License LawIntermediateColorado Exam
Colorado requires that all trust accounts held by brokers for client funds be maintained at:
AA federally insured financial institutionCorrect
BThe Colorado Division of Real Estate
CThe county clerk's office
DThe title company handling the transaction
Why A federally insured financial institution Is Correct
Answer A: A federally insured financial institution
Colorado law requires all broker trust accounts to be held in a federally insured financial institution, such as an FDIC-insured bank or NCUA-insured credit union, to protect client funds.
Key Colorado License Law Terms in This Question
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Key Terms to Know
Lien
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
EscrowA neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
State-Specific Concepts
Trust Account Rules
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