Property Management

A Kentucky property manager who collects January rent in December must:

ADeposit funds in the operating account immediately
BHold the funds in a separate trust account until January✓ Correct
CReturn the early payment to the tenant
DApply the funds to the next month's maintenance reserves

Explanation

Prepaid rent is tenant funds that must be held in a separate trust account until it is earned (the rental period begins). Commingling prepaid rent with operating funds violates Kentucky trust account requirements.

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