Under California DRE regulations, once a broker physically receives a buyer's earnest money check, by when must the broker deposit those funds into a trust account or escrow?
Correct Answer
C) By the next business day after receiving the funds, unless written instructions direct the broker to hold the check uncashed
California Business and Professions Code §10145 requires a broker to deposit trust funds into a trust account or escrow by the next business day after receipt, unless the broker has written instructions from the principal to hold the check uncashed pending acceptance or another specified condition. This is the DRE's trust fund handling rule and is distinct from the C.A.R. RPA's contractual deadline, which governs when the buyer must deliver the deposit to the broker — typically 3 business days after acceptance.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
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