Broker Greg operates a property management company and holds security deposits for residential tenants in addition to sales transaction earnest money. Under Maryland law, how must Greg handle these two categories of funds?
Correct Answer
A) Security deposits must be held in a separate account from sales transaction funds, each in a federally insured institution
Under Maryland law, security deposits for residential tenants are governed by Md. Code Ann., Real Prop. § 8-203, which requires them to be held in a separate federally insured account, distinct from other funds. Maryland real estate license law under COMAR 09.11.03 also requires sales transaction trust funds to be maintained in a separate trust account. Greg must maintain these as separate accounts—one for security deposits and one for sales/earnest money—each in a federally insured institution.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Price fixing is an illegal antitrust practice in which competing real estate brokerages agree to charge the same commission rates, fees, or other pricing for their services. It is a per se violation of the Sherman Antitrust Act.
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.
More Practice Of Real Estate Questions
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