Term
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Definition
Earnest money deposits
Money received upon final settlements
Rents
Security deposits
Money advanced by buyer or seller for the payment of expenses in connection with closing of real estate transactions
Money advanced by his or her principal or others for expenditures on behalf of subject principal
Personal property (jewelry, gold, silver, etc.) |
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Term
| true or false: A broker may not keep any personal funds in the trust account, except amounts sufficient to ensure the integrity of the account and cover any charges made by the financial institution for servicing the trust or escrow account. |
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Definition
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Term
| A broker is not prohibited from placing escrow monies in an interest bearing account. However, he or she must: |
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Definition
Disclose in writing to all parties that the account bears interest.
Identify the party receiving the interest.
The Commission does not prohibit the broker from receiving the earned interest. |
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Term
| true or false: The interest-bearing account must be a demand type account. This prohibits the use of certificate of deposit or other types of time deposits as trust/escrow accounts. |
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Definition
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Term
| A broker is required to notify the Commission in writing of all: |
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Definition
Trust or escrow accounts
Security deposit accounts
Rental management operating accounts
Interest bearing accounts in which trust funds are held
A broker must inform the Commission in writing of any accounts which are closed and no longer in use. |
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Term
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Definition
| A broker must furnish a signed settlement statement in each real estate transaction in which he or she acts as broker. The statement must be furnished at the time the transaction is consummated. |
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Term
| true or false: (payment of funds) The failure to pay out money within three (3) days after a closing shall be prima facie evidence of a violation if any hearing to suspend or revoke his or her license should take place. |
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Definition
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Term
| Under what circumstances is a broker not required to maintain a trust account? |
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Definition
| If a broker does not accept money or other non-monetary items (diamond ring, stocks, bonds) belonging to others. |
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Term
| What is commingling? Are there any exceptions that apply? |
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Definition
Commingling is mixing personal funds in a trust account.
The broker can keep a small amount of personal funds in the trust account to cover bank service charges. |
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Term
| What happens to escrow money if the transaction doesn't complete? |
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Definition
| It must be disbursed promptly according to the terms of the contract. |
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Term
| true or false: A broker must maintain all records and files for a minimum of five (5) years after completion or termination of a transaction. In the case of trust account records, the five years begin with the date of the disbursal of funds. |
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Definition
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Term
| Storing Records on Alternative Media |
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Definition
Trust account records must be maintained by the broker in their original format for a minimum of two (2) years. They may then be transferred to an alternative media for the remaining required record retention time.
A broker will maintain no fewer than two (2) copies of the alternative media. |
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Term
| A broker has a number of tasks to complete if he or she chooses to cease all or part of the real estate activities: |
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Definition
Return the broker's license certificate and pocket identification card and all license certificates of those associated with the broker to the Commission
Terminate all advertising in the name of the firm within thirty (30) days of cessation of real estate activities.
Remove all offering signs within thirty (30) days of cessation of real estate activities. |
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Term
| How long must a broker maintain files and records? |
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Definition
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Term
| How long must trust account records be maintained before they can be transferred to alternative media? |
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Definition
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Term
| Broker Gretchen has decided to go out of the real estate business. What responsibility does she have regarding advertising and offering signs? |
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Definition
| She must terminate all advertising and remove all offering signs within 30 days of ceasing real estate activities. |
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