Sandra holds an Indiana Broker license and is affiliated with Sunrise Realty, managed by Tom, a licensed Managing Broker. Sandra's client asks her to hold earnest money in an escrow account until closing. Under Indiana law, which of the following best describes Sandra's authority regarding this earnest money?
Correct Answer
A) Sandra must deposit the earnest money into the trust account maintained by Tom, the Managing Broker of Sunrise Realty.
Under IC 25-34.1, trust account management is a responsibility of the Managing Broker, not the affiliated entry-level Broker. Sandra, as an affiliated Broker, does not have authority to maintain her own trust or escrow account. All earnest money and client funds must be deposited into the trust account maintained by the Managing Broker (Tom) of the affiliated brokerage (Sunrise Realty).
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Related Topics & Key Terms
Key Terms:
Related Concepts
Florida brokers are required to maintain transaction records and escrow records for a minimum of five years.
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.
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