Escrow & Title
Under Pennsylvania law, a broker's escrow account may NOT be used to:
AHold earnest money deposits from buyers
BHold rent collected for a property owner
CPay the broker's personal expenses or business operating costs✓ Correct
DHold security deposits for a managed property
Explanation
Commingling is prohibited under RELRA — a broker's escrow (trust) account must never be used to pay personal or business operating expenses. These accounts exist solely to hold funds belonging to others.
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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.
Earnest MoneyA 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.
Closing CostsFees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
Math Concepts
State-Specific Concepts
Escrow Disputes
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