Rhode Island License Law
Rhode Island requires real estate brokers to maintain trust accounts for client funds. Commingling of client funds means:
ADepositing earnest money in the account within 3 days
BMixing client funds with the broker's personal or business funds✓ Correct
CInvesting client funds in short-term securities
DTransferring escrow funds to the title company
Explanation
Commingling is the illegal act of mixing client funds (such as earnest money deposits) with the broker's personal or general business funds. Rhode Island law requires all client funds to be held in a separate trust or escrow account.
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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.
EscrowA 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.
Math Concepts
State-Specific Concepts
Trust Account RulesEscrow Disputes
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