A California real estate broker is closing the brokerage and canceling the broker license. Which of the following correctly describes the broker's obligations regarding the trust account under DRE regulations?
Correct Answer
A) Disburse all trust funds to the rightful owners, close the trust account only after all obligations are fulfilled, and notify the DRE of the license cancellation
Under California Business & Professions Code §10145 and DRE regulations, a broker holds trust funds in a fiduciary capacity. Upon closing a brokerage, the broker must disburse all trust funds to the rightful owners or parties entitled to them before closing the account. The trust account may not be closed while any client funds remain in it. Additionally, the broker must notify the DRE of the license cancellation. Proper documentation of all final disbursements must be retained per record-keeping requirements.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Fair housing laws apply to a broad range of activities related to housing, including sale, rental, financing, and advertising.
A seller's disclosure statement is a form that sellers complete to inform buyers about the condition and history of the property, including known defects, past repairs, insurance claims, and environmental issues.
Many states and localities have fair housing laws that expand upon the protections offered by the federal Fair Housing Act.
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