Broker Paul maintains a trust account with $75,000 in client funds. He keeps $200 of his own money in the account at all times to cover potential bank service charges. Under Maryland law, this practice is best characterized as:
Correct Answer
B) Permissible, because Maryland allows a small broker-owned reserve in trust accounts to cover bank fees
Maryland regulations under COMAR 09.11.03 recognize that brokers may maintain a minimal amount of their own funds in the trust account solely to cover bank service charges and prevent the account from going negative due to fees. This limited exception to the general prohibition on commingling is recognized in Maryland practice and does not constitute a violation, provided the broker-owned amount is minimal and properly documented.
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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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