North Carolina License LawIntermediateNorth Carolina Exam
A NC broker who deposits a client's earnest money check into their personal account instead of a trust account has committed:
AA minor bookkeeping error
BCommingling of trust funds — a serious license law violationCorrect
CA violation of RESPA only
DNo violation if the money is eventually transferred, in general
Why Commingling of trust funds — a serious license law violation Is Correct
Answer B: Commingling of trust funds — a serious license law violation
Depositing client funds (earnest money, security deposits) into a personal or operating account instead of a trust account is commingling — a serious license law violation subject to disciplinary action.
Key North Carolina License Law Terms in This Question
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
Math Concepts
State-Specific Concepts
Trust Account RulesLicense Law
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