Property Management
In Tennessee, a 'management trust account' maintained by a property manager must:
AEarn the highest possible interest for the manager
BBe a separate account from the manager's personal and operating funds✓ Correct
CBe held in a federal savings institution only
DBe shared with the principal broker's personal account
Explanation
A property management trust account must be maintained separately from the manager's personal and operating accounts. Commingling client funds with personal or operating funds is a violation of Tennessee license law.
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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.
Fiduciary DutyThe highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
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.
State-Specific Concepts
Trust Account RulesLicense Law
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