New York License Law
Under New York law, a real estate broker must keep client funds in:
AA personal checking account
BA separate escrow or trust account distinct from the broker's operating funds✓ Correct
CA safety deposit box at the local bank
DThe DOS-designated state escrow fund
Explanation
New York Real Property Law requires brokers to deposit client funds (deposits, advances) in a separate escrow or trust account. Commingling client funds with operating funds is a license law violation.
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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.
Transfer TaxA tax imposed by state or local governments when real property ownership is transferred, typically based on the sale price.
State-Specific Concepts
Trust Account RulesLicense Law
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