Employing Broker Carol in Pueblo manages a property management division in addition to her sales brokerage. She receives security deposits from residential tenants and also holds earnest money from sales transactions. Under Colorado CREC rules, which of the following best describes how Carol must handle these two types of funds?
Correct Answer
D) Carol must maintain a completely separate trust account for property management funds and another for sales transaction funds
Under CREC Rule 6.5, a broker who engages in both property management and sales activities must maintain separate trust accounts for each type of business. Property management funds (including security deposits and rent) must be kept in a dedicated property management trust account, while sales transaction funds (including earnest money) must be held in a separate sales trust account. Commingling these two types of funds — even in a properly designated trust account — violates Colorado rules.
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Related Topics & Key Terms
Key Terms:
Related Concepts
License requirements are the mandatory qualifications—including pre-licensing education, examination, and background checks—that a person must satisfy before legally practicing real estate. These requirements are established and enforced by each state's real estate commission.
Market allocation is an illegal antitrust practice in which competing real estate brokerages agree to divide markets among themselves by geographic area, property type, or price range, thereby eliminating competition.
Price fixing is an illegal antitrust practice in which competing real estate brokerages agree to charge the same commission rates, fees, or other pricing for their services. It is a per se violation of the Sherman Antitrust Act.
More Practice Of Real Estate Questions
In Wyoming real estate practice, an associate broker or salesperson is not associated with a responsible broker at renewal. What should the licensee remember?
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