Broker Chen operates a real estate office in Hartford, Connecticut. She receives an earnest money deposit of $8,500 from a buyer client. Under Connecticut law, what is the required handling of this deposit?
Correct Answer
B) Broker Chen must deposit the funds into a separate escrow or trust account maintained exclusively for client funds
Under CGS Chapter 392, Connecticut real estate brokers are required to deposit client funds, including earnest money deposits, into a separate escrow or trust account that is maintained exclusively for client funds and is not commingled with the broker's personal or operating funds. This protects client money and is a fundamental fiduciary and regulatory obligation under Connecticut license law.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A tie-in arrangement is an illegal antitrust practice in which a seller conditions the purchase of one product or service on the buyer's agreement to purchase a separate product or service.
A trust account, also called an escrow account, is a separate bank account maintained by a broker to hold funds belonging to others, such as earnest money deposits, security deposits, or other client funds.
Advertising regulations govern how real estate licensees may market properties and services, requiring truthful, non-deceptive advertising that includes proper identification of the brokerage.
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