Broker Henry in Traverse City discovers that his office manager — who is not a licensed real estate salesperson — has been making deposits into and withdrawals from the broker's trust account for the past six months without Henry's knowledge. All transactions were properly recorded, no funds are missing, and all client accounts are fully intact. Under Michigan's Occupational Code, which of the following most accurately describes Henry's situation?
Correct Answer
B) Henry may have violated Michigan law because trust account transactions must be controlled by the licensed broker, and delegating this authority to an unlicensed person is improper
Under MCL 339.2512 and the Michigan Occupational Code, the licensed broker bears ultimate responsibility for all trust account activity. While a broker may authorize staff to assist with administrative tasks, delegating control over trust account deposits and withdrawals to an unlicensed person — particularly without supervision — raises serious compliance concerns. The broker's lack of knowledge does not eliminate liability; in fact, the failure to supervise trust account activity is itself a violation of the broker's duties under Michigan law. The Bureau of Professional Licensing expects brokers to exercise active oversight of all trust account transactions.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Commingling is the illegal act of mixing client trust funds with a broker's personal or business operating funds; conversion is the misappropriation of those funds.
Continuing education (CE) refers to the ongoing coursework that licensed real estate professionals must complete during each renewal cycle to maintain an active license. CE ensures agents stay current with changes in laws, regulations, and industry practices.
The National Do Not Call Registry is a federal program administered by the FTC that allows consumers to opt out of receiving unsolicited telemarketing calls, including calls from real estate agents soliciting business.
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?
In Wyoming real estate practice, a first-time salesperson applicant completes coursework. What should the licensee remember?
A Wyoming licensee is reviewing an out-of-state salesperson applicant prepares for testing. What is the best answer?
In Wyoming real estate practice, a salesperson applicant age is reviewed. What should the licensee remember?
A responsible broker in Wyoming asks about a nonresident applicant provides home-state evidence. Which answer follows Wyoming law?
- → A responsible broker in Wyoming asks about a first-time salesperson applicant prepares for Wyoming-specific licensing. Which answer follows Wyoming law?
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- → A responsible broker in Wyoming asks about the Commission director receives a complaint about real estate practice. Which answer follows Wyoming law?
- → For the Wyoming salesperson state portion, a first-time Wyoming salesperson applicant starts the application process. Which statement is correct?
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- → For the Wyoming salesperson state portion, a licensee asks how long Wyoming renewal periods are. Which statement is correct?
- → Which Wyoming rule applies when a licensee does not timely submit the complete renewal application, proof of CE, and renewal fees?
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