Property Management
A Nevada property manager collects first month's rent, last month's rent, and a security deposit at move-in. How must these funds be handled under NRS 645?
AAll funds may be deposited into the broker's general operating account
BSecurity deposits and prepaid rent must be held in a separate trust account maintained by the broker✓ Correct
CSecurity deposits must be returned immediately within 5 days if the tenant changes their mind
DOnly the security deposit requires trust account treatment; prepaid rent may be kept in the operating account
Explanation
Under NRS 645, all funds received on behalf of clients — including security deposits, prepaid rent, and advance rents — must be deposited into a separate trust account maintained by the licensed broker. Commingling these funds with operating funds is a serious violation that can result in license suspension or revocation.
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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.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Right of First RefusalA contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
State-Specific Concepts
Trust Account Rules
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