A California broker maintains a trust account for client deposits. Under DRE regulations, the broker may keep a maximum of how much of the broker's own funds in the trust account to cover bank charges?
Correct Answer
C) $200
Commingling is defined by Commissioner's Regulation 2835 (Title 10, California Code of Regulations, § 2835), which also sets out the narrow exceptions to it. One of those exceptions lets a broker deposit and keep up to $200 of the broker's own funds in a trust account to cover the bank's service charges on that account. Personal funds above $200 in a trust account are commingled, one of the violations the Department of Real Estate cites most often in audits, and commingling is grounds for discipline even where no client loses a dollar.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A non-agency relationship where the broker facilitates a real estate transaction without representing either party, owing limited duties of honesty, fairness, and competence to both.
The legal principle that holds a broker responsible for the actions of their agents and employees performed within the scope of the agency relationship.
An agency relationship created when a principal's actions or words lead a third party to reasonably believe that an agent has authority, and the principal fails to correct this belief.
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