Kansas License Law
Under Kansas License Law, 'trust funds' that must be segregated from operating funds include:
AThe broker's own investment income
BEarnest money, security deposits, and other funds held on behalf of clients✓ Correct
CMarketing and advertising funds
DThe broker's personal savings
Explanation
Trust funds are client money held by a licensee — including earnest money deposits, security deposits, and advance rents. These must be deposited in a separate, identifiable trust account.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
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.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
Math Concepts
State-Specific Concepts
Trust Account RulesEscrow DisputesLicense Law
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