A Colorado employing broker receives a $3,000 earnest money check from a buyer. The broker deposits the check into the trust account, but the check bounces due to insufficient funds in the buyer's account. Under Colorado CREC rules, who is responsible for the resulting trust account shortage?
Correct Answer
A) The employing broker, who must cover the shortage and report it to CREC
Under CREC rules, the employing broker is responsible for maintaining accurate trust account balances at all times. When a deposited check bounces and creates a shortage, the employing broker must immediately cover the shortage with their own funds and notify CREC. The broker cannot allow the trust account to fall below the required balance, regardless of the reason for the shortage.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Florida brokers are required to maintain transaction records and escrow records for a minimum of five years.
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