A California broker's trust account has the following balances: Client A's earnest money deposit of $25,000, Client B's security deposit of $3,500, and Client C's advance rent payment of $2,800. The broker also has $200 of personal funds in the account per the $200 allowance. What should be the total trust account balance?
Correct Answer
C) $31,500
Add the client funds and the broker's permitted cushion: $25,000 plus $3,500 plus $2,800 is $31,300 of trust funds, and the $200 of the broker's own money brings the required balance to $31,500. Commissioner's Regulation 2835 allows a broker to keep up to $200 of personal funds in the trust account to cover service charges, and that amount is not treated as commingling. Regulation 2832.1 is a different rule, governing a reduction of the account below the aggregate trust fund liability, which requires the prior written consent of each owner of the affected funds.
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