A real estate agency's trust account is audited and found to have a shortfall of $15,000. Under consumer protection frameworks, which party is primarily responsible for making good this shortfall?
Correct Answer
C) The real estate agency as licence holder, which must make good the shortfall
The real estate agency as the license holder bears primary responsibility for trust account shortfalls and must rectify any deficiency. While compensation funds and insurance may ultimately provide consumer protection, the agency has the immediate obligation to restore proper trust account balances.
Why This Is the Correct Answer
The licensee in whose name the trust account is kept must make good any deficiency immediately. Insurance or compensation funds may help consumers later but do not shift that primary obligation.
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