Which of the following activities requires money to be deposited into a trust account?
Correct Answer
C) Holding deposits paid by prospective tenants for a rental property
Holding deposits from prospective tenants are client funds that must be held in trust accounts as they belong to the client, not the agency. Commission payments, office rent, and marketing expenses are business operational costs that are paid from the agency's general accounts.
Why This Is the Correct Answer
Holding deposits paid by prospective tenants belong to the tenant until the tenancy starts or the money is refunded. Because the agent holds them on someone else's behalf, they must be paid into the trust account.
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