A property manager collects a $2,000 security deposit from a new tenant. Under proper trust fund handling, where must the property manager deposit the security deposit?
Correct Answer
B) In a trust or escrow account as required by state law and the management agreement
Security deposits are trust funds that belong to the tenant or owner, not the property manager. They must be deposited in a designated trust or escrow account as required by state law and the management agreement.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The legal ending of an agency relationship, which can occur through completion, expiration, mutual agreement, breach, death, incapacity, or bankruptcy of either party.
The fiduciary obligation to protect a client's private information and not disclose it to third parties without permission, surviving even after the agency relationship ends.
In real estate, a client is someone to whom the agent owes fiduciary duties through an agency relationship, while a customer is a third party to whom the agent owes only honesty and fair dealing.
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