A California salesperson receives an earnest money deposit from a buyer. Under Cal. B&P Code §10145, what must the salesperson do with the funds?
Correct Answer
D) Deliver the funds to the employing broker, who must place them in a trust account or escrow within three business days of receipt
Under Cal. B&P Code §10145 a salesperson who receives trust funds must deliver them to the employing broker, or, at the broker's direction, to the owner of the funds or to a neutral escrow depository. Commissioner's Regulation 2832 then gives the broker until the third business day following receipt of the funds by the broker or by the broker's salesperson to place them with the owner, in a neutral escrow depository, or in a trust account. The clock runs from receipt, not from acceptance of the offer; acceptance matters only in the narrow case where the buyer has instructed in writing that the check not be deposited or cashed until the offer is accepted and the seller has been told the check is being held. A salesperson never has authority to bank trust funds personally or to hand them back on their own judgment.
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