A broker removes earnest money from the escrow account before the transaction is consummated or terminated. No written agreement of the parties, court order, or other authorized exception exists. Under the Illinois License Act of 2000, which statement is correct?
Correct Answer
C) The removal is impermissible because escrow funds must remain on deposit until the transaction is consummated or terminated, unless an authorized disbursement exception applies.
Under the Illinois License Act of 2000 and IDFPR escrow rules, a broker must keep funds belonging to others in the required escrow account until the transaction is consummated or terminated. Disbursement before that point is only lawful when a specific authorized exception applies — such as a written agreement of all parties, a court order, or a reasonable interpretation of the contract. None of those conditions exist here, making the removal a violation.
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Related Topics & Key Terms
Key Terms:
Related Concepts
In real estate, the distinction between an independent contractor and an employee determines tax treatment, liability, and the level of control a broker may exercise over the agent's daily activities. Most real estate agents operate as independent contractors.
Florida real estate licenses must be renewed biennially, and sales associates have specific post-license education requirements for their first renewal.
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.
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