Broker Wendy in Kalamazoo is closing her real estate office and surrendering her broker's license. She is currently holding $18,000 in earnest money for three pending transactions in her trust account. What is Wendy's obligation regarding these trust funds under Michigan law?
Correct Answer
C) Wendy must ensure all trust funds are properly disbursed or transferred to another licensed broker before or upon surrendering her license
Under Michigan law and the requirements of MCL 339.2512, a broker who is closing a business or surrendering a license must ensure that all trust funds are properly accounted for and either disbursed in accordance with the underlying agreements or transferred to another licensed broker who will assume responsibility for the pending transactions. The broker cannot simply abandon trust account obligations upon license surrender.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Advertising regulations govern how real estate licensees may market properties and services, requiring truthful, non-deceptive advertising that includes proper identification of the brokerage.
Antitrust violations in real estate occur when competing brokerages or agents engage in practices that restrain trade, reduce competition, or harm consumers through collusion. These violations are governed by the Sherman Antitrust Act and can result in severe penalties.
Broker supervision is the legal obligation of a designated or managing broker to oversee and be accountable for the real estate activities of all salespersons and associate brokers operating under their license.
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