A Connecticut broker manages rental properties and collects security deposits from tenants. Under Connecticut law, which of the following correctly describes the broker's obligations regarding tenant security deposits held in trust?
Correct Answer
B) Security deposits must be held in a separate trust account from sales transaction escrow funds, and tenants must be notified of the bank and account number within 30 days of receipt
Under Connecticut's security deposit statutes (CGS § 47a-21) and CREC trust account regulations, security deposits collected from residential tenants must be maintained in a separate trust account from real estate sales escrow funds. Additionally, Connecticut law requires landlords (and by extension, property managers acting as their agents) to provide tenants with written notice of the name and address of the bank where the security deposit is held within 30 days of receipt. This dual requirement — separate accounting and tenant notification — is a Connecticut-specific rule frequently tested on the state exam.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Antitrust violations in real estate occur when competing brokerages or agents engage in practices that restrain trade, reduce competition, or harm consumers through collusion. These violations are governed by the Sherman Antitrust Act and can result in severe penalties.
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