A California real estate salesperson receives a $25,000 cashier's check as an earnest money deposit from a buyer. The purchase agreement is silent on the timing of deposit handling. Under DRE regulations, what is the salesperson's obligation regarding this trust fund, and what is the broker's subsequent obligation?
Correct Answer
B) The salesperson must deliver the check to the broker immediately, and the broker must deposit or escrow it by the third business day after receipt
Business and Professions Code §10145(c) requires a salesperson who accepts trust funds on the broker's behalf to deliver them immediately to the broker, or, if the broker so directs, to place them into the broker's trust account or a neutral escrow depository. There is no one-day or three-day window for the salesperson, who has no independent authority to hold trust funds. 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 into a neutral escrow depository, into the hands of the broker's principal, or into a trust account. The broker's three-day clock starts when the salesperson took the check, not when the broker finally saw it.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Mold disclosure involves informing buyers about the presence of mold or conditions that are conducive to mold growth in a property. While no federal mold disclosure law exists, many states require disclosure of known mold issues.
A property condition disclosure is a written statement by the seller detailing the known condition of the property, including defects, repairs, and issues with major systems. Most states require sellers to complete this form.
Protected classes are groups of people who are legally shielded from discrimination based on specific characteristics.
More Practice Of Real Estate Disclosures Questions
Under California law, a real estate agent owes a duty of honest and fair dealing to all parties in a transaction, not only to the agent's own client. Which provision most directly establishes this duty?
A landlord is required to provide a copy of the written lease to the tenant within:
A California-licensed salesperson uses the title 'Real Estate Consultant' on business cards and marketing materials without holding any special certification or designation. Under DRE regulations, this practice is:
Barnard made an offer to buy a vacant residence. The offer was accepted by the seller. Prior to the close of escrow, Barnard requested permission from the broker to enter and make minor repairs to the house. Which of the following is true?
Most common business structure for one individual:
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- → At a DRE administrative disciplinary hearing in California, what standard of proof must the Department meet to sustain a finding against a licensee?
- → The Transfer Disclosure Statement requires sellers to disclose various known property conditions under California Civil Code §1102 et seq. All of the following must be disclosed on the TDS EXCEPT:
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- → A salesperson receives a $2,000 cash earnest money deposit from a buyer during a property showing. Under California trust fund rules, what is the salesperson's required next step?
- → A California salesperson receives a $3,000 earnest money deposit from a buyer on Tuesday morning. The salesperson does not deliver the funds to the broker until the following Monday. Under California trust fund rules, has a violation occurred?
- → A California property owner in a Mello-Roos CFD discovers that the bond proceeds were mismanaged by the CFD administrator and the planned community park was never built, even though property owners have been paying the special tax for 10 years. What legal recourse does the property owner have?
- → The Real Estate Commissioner may discipline a licensee for the conduct described in Business and Professions Code §§10176 and 10177. Which of the following would NOT be grounds for disciplinary action?
- → Which of the following correctly describes California's mandatory fair housing continuing education requirement for real estate license renewal?
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