Grace is a licensed Michigan real estate salesperson. Her client, a buyer named Kevin, gives her a $10,000 earnest money check made out to Grace personally. Grace's employing broker, Superior Realty, maintains a dedicated trust account for client funds. Under Michigan law, what must Grace do with the earnest money?
Correct Answer
A) Grace must immediately deliver the earnest money to her employing broker at Superior Realty for deposit into the firm's trust account.
Under MCL 339.2512 and Michigan administrative rules, a salesperson who receives earnest money must immediately deliver it to the employing broker for deposit into the broker's separate trust account. The salesperson has no authority to hold, deposit, or otherwise handle client funds independently. The broker is legally responsible for maintaining the trust account and ensuring proper handling of client funds.
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Related Topics & Key Terms
Key Terms:
Related Concepts
FREC has the authority to impose fines and other disciplinary actions on licensees who violate real estate laws and rules.
A group boycott is an illegal antitrust practice in which two or more competing real estate businesses agree to refuse to work with a specific person, company, or entity in order to harm that party's ability to compete.
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.
More Practice Of Real Estate Questions
In Wyoming real estate practice, an associate broker or salesperson is not associated with a responsible broker at renewal. What should the licensee remember?
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