Property Management
A Minnesota property manager who collects rents must hold those funds in:
AThe property manager's personal savings account
BA separate trust account for the benefit of the property owner✓ Correct
CThe property management company's operating account
DA reserve fund controlled by the tenant association
Explanation
Property managers who hold client funds must maintain a separate trust (escrow) account to avoid commingling and ensure the funds are protected for the property owner's benefit.
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Key Terms to Know
Escrow
A neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
LienA 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.
State-Specific Concepts
Trust Account Rules
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