Property Management
A property manager in Minnesota who collects rents and security deposits must:
ADeposit them in their personal bank account
BHold them in a separate trust account and account for them separately from their own funds✓ Correct
CInvest them in securities approved by the Department of Commerce
DTransfer them to the owner immediately upon receipt
Explanation
Minnesota real estate license law requires property managers who hold client funds (rents, security deposits) to maintain them in a separate trust account, segregated from the manager's own funds. Commingling client funds with personal funds is a license violation.
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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 RulesLicense Law
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