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Practice Of Real EstateTrust AccountsHARD

A Fayetteville broker is auditing the firm's approach to trust deposit timing and negotiable instruments. Which statement is NOT accurate under current North Carolina law?

Correct Answer

A) A check payable to the seller automatically becomes trust money under current North Carolina rules

This choice is the inaccurate statement. The other three options describe the current North Carolina rule or guidance more accurately.

Answer Options
A
A check payable to the seller automatically becomes trust money under current North Carolina rules
B
Brokers should distinguish between money they hold in fiduciary capacity and funds that are never entrusted to the brokerage, because the rule treatment differs.
C
When trust money is received in fiduciary capacity, the broker generally must deposit it no later than three banking days after receipt.
D
Proper handling of negotiable instruments protects consumers and helps the broker demonstrate compliance in an audit.

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Related Topics & Key Terms

Key Terms:

3_banking_daysaudit_trailcore_rules_and_definitionsdifficulty_4fiduciary_capacitync_statenc_trust_account_escrow_requirementsnorth_carolinareceipt_of_fundsreversetrust_deposit_timing_and_instruments
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