A licensed Indiana broker, Chen, receives earnest money from a buyer in connection with a purchase agreement. Under Indiana law, what is Chen's obligation regarding this earnest money deposit?
Correct Answer
D) Chen must deposit the earnest money into a trust account maintained by the managing broker's firm within a reasonable time
Under IC 25-34.1, all client funds including earnest money must be deposited into a properly maintained trust account (also called an escrow account) held by the managing broker's firm. Client funds must never be commingled with the broker's personal or business operating funds. The managing broker is responsible for maintaining the trust account in compliance with Indiana law.
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Related Topics & Key Terms
Key Terms:
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