Salesperson Gina works for Broker Howard's real estate company in Bloomington, Minnesota. A seller client hands Gina a $3,500 earnest money check at the time of signing the purchase agreement. Under Minnesota license law, what must Gina do with the check?
Correct Answer
A) Promptly deliver the check to Broker Howard for deposit into the broker's trust account
Under Minn. Stat. Ch. 82, salespersons are not authorized to maintain trust accounts or deposit client funds. When a salesperson receives earnest money or other client funds, they must promptly deliver those funds to their supervising broker. The broker is then responsible for depositing the funds into the brokerage's trust account within the required timeframe. This is a fundamental rule of trust account management under Minnesota law.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Commingling is the illegal act of mixing client funds with a broker's personal or business operating funds, while conversion is the unauthorized use of client funds for the broker's own benefit. Both are serious violations that can result in license revocation.
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.
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