Broker Rachel in Flint maintains one trust account for all client funds. She is currently holding $8,000 in earnest money for Client A and $5,000 in earnest money for Client B in the same account. The total trust account balance is $13,000. An audit reveals the balance is correct and all funds are accounted for in the ledger. Which of the following statements is most accurate under Michigan law?
Correct Answer
B) Rachel is in compliance because one trust account may hold funds for multiple clients if properly ledgered
Under MCL 339.2512, a Michigan broker is required to maintain a separate trust account distinct from personal and operating accounts, but is not required to maintain a separate trust account for each individual client. A single trust account may hold funds belonging to multiple clients, provided the broker maintains accurate, separate ledger records for each client's funds. The key requirement is proper recordkeeping, not account separation by client.
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Related Topics & Key Terms
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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.
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