Texas License Law
Under TREC rules, a real estate license holder who receives funds must safeguard them as:
APersonal property until the transaction closes
BTrust funds held in trust for the benefit of the parties✓ Correct
CA commission advance from their broker
DA reserve fund for future transactions
Explanation
Any money received by a license holder in connection with a real estate transaction on behalf of another party (earnest money, option fees, rent, security deposits) must be treated as trust funds—held in trust for the benefit of the parties. These funds belong to the client, not the agent or broker, until properly disbursed.
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