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?
Correct Answer
B) Yes — the funds had to reach the broker immediately, and no later than three business days after receipt
Business and Professions Code §10145(c) requires a salesperson who accepts trust funds to deliver them to the broker immediately, or, if the broker so directs, to the broker's principal, a neutral escrow depository, or the broker's trust fund account. Commissioner's Regulation 2832 sets the outer limit: the funds must reach one of those destinations no later than three business days following receipt by the broker or by the broker's salesperson. Counting business days from Tuesday, that deadline was Friday. Holding the deposit until the following Monday is a fourth business day and a violation, whatever the amount.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Megan's Law requires states to make information about registered sex offenders available to the public. Some states require real estate agents to inform buyers about the availability of sex offender registries.
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.
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:
- → A developer proposes a new eight-unit condominium building in San Francisco on a parcel that an NHD report shows lies within a delineated Alquist-Priolo Earthquake Fault Zone. Under the Alquist-Priolo Act, what must happen before the city may approve the project?
- → 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 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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