Property Management
In North Dakota, a property manager must keep owner funds in a separate trust account to prevent:
ADouble taxation of rental income
BCommingling of client funds with the manager's personal or business funds✓ Correct
CUnauthorized property inspections
DTenant rent increases
Explanation
Commingling—mixing client (owner) funds with the property manager's personal or business funds—is prohibited. North Dakota requires that trust accounts be maintained separately to protect owners and tenants.
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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 Rules
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