Property Management
Which of the following is the BEST practice for a Connecticut property manager maintaining a trust account?
ADepositing tenant security deposits in the manager's personal savings account
BMaintaining separate trust accounts for each property and reconciling monthly✓ Correct
CKeeping security deposits in cash in the office safe
DInvesting security deposits in stocks to earn higher returns
Explanation
Best practices require separate trust accounts for each property (or client) to avoid commingling, with monthly reconciliation of all deposits and disbursements. This protects both clients and the manager.
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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.
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.
State-Specific Concepts
Trust Account Rules
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