Connecticut salesperson Greg collects a $5,000 good faith deposit from buyer Melissa after she signs a purchase agreement. Greg deposits the funds into his personal checking account, intending to transfer them to his broker's trust account the following week. Under Connecticut agency law, which fiduciary duty has Greg violated?
Correct Answer
A) Accounting, by failing to promptly deposit client funds into the broker's trust account
Greg violated the fiduciary duty of accounting. Under Connecticut law (CGS Chapter 392), all client funds must be promptly deposited into the supervising broker's trust account and must never be commingled with the licensee's personal funds. Depositing a client's earnest money into a personal checking account is both a breach of the fiduciary duty of accounting and a violation of Connecticut's trust account statutes, which can result in license suspension or revocation.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An agency relationship created when a principal's actions or words lead a third party to reasonably believe that an agent has authority, and the principal fails to correct this belief.
An agency relationship created when a principal approves or accepts an agent's previously unauthorized actions, effectively granting authority after the fact.
The legal requirement for real estate agents to inform all parties about who they represent in a transaction, typically provided at first substantive contact.
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