Sarah is a Massachusetts licensed real estate broker. She receives a $10,000 earnest money deposit from a buyer on a Friday afternoon after her bank has closed. What is the most appropriate action Sarah should take with these funds?
Correct Answer
B) Hold the funds in her office safe and deposit them into the trust account on the next business day
Massachusetts Board regulations under 254 CMR 3.00 require that client funds be deposited into the trust account as soon as practicable. When a bank is closed and immediate deposit is impossible, the broker may hold the funds securely (such as in a locked office safe) and must deposit them into the designated trust account on the very next business day. This is the accepted practice under Massachusetts regulations.
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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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