After a transaction closes, a California broker pays the salesperson's commission from the broker's personal checking account rather than the brokerage operating account. The transaction funds were deposited into and properly disbursed from the trust account. Under DRE regulations, how should this payment be evaluated?
Correct Answer
D) It is irregular but not necessarily a DRE violation if trust funds were properly handled and the salesperson's earned commission was correctly disbursed
Under DRE regulations, the required sequence for commission handling is: (1) transaction funds are deposited into the broker's trust account; (2) once the transaction closes and the commission is earned, the broker's commission is transferred out of the trust account to the broker's operating account; and (3) the salesperson's share is paid from the operating account. Paying from a personal account rather than the operating account deviates from standard practice and raises recordkeeping concerns, but it does not constitute a per se DRE violation if the trust account was handled correctly and the salesperson received the proper amount. The DRE's primary concern is the integrity of trust fund handling, not the internal account from which a broker ultimately pays an already-earned commission.
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Environmental hazards disclosure involves informing buyers about environmental contamination or hazards affecting or potentially affecting a property, including underground storage tanks, contaminated soil, hazardous waste, and proximity to Superfund sites.
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