Property Management
A West Virginia property manager must maintain separate accounts for each property type. Which of the following represents proper trust accounting?
AOne account combining all owner funds and manager's commissions
BSeparate trust accounts for client funds (rent, deposits) versus the manager's operating account✓ Correct
CClient funds deposited into the manager's personal savings account for safety
DFunds held in cash rather than bank accounts to avoid fees
Explanation
Proper trust accounting requires maintaining client funds (rent collected, security deposits) in a trust or escrow account completely separate from the property manager's own operating account. Commingling is a serious license law violation.
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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.
LienA 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.
Math Concepts
State-Specific Concepts
Trust Account RulesLicense Law
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