Salesperson Kevin deposits a buyer's earnest money check of $8,000 into his personal checking account while waiting for his broker to set up the escrow account. His broker, Sandra, is aware of this arrangement and has not objected. Under RSA Chapter 331-A, which statement best describes the legal situation?
Correct Answer
D) Both Kevin and Sandra may face disciplinary action, as the broker is responsible for supervising trust account compliance
Under RSA 331-A:26, commingling client funds with personal funds is a violation of NH license law. Both Kevin and Sandra face potential disciplinary action: Kevin for the direct act of commingling, and Sandra as the supervising broker who was aware of and failed to correct the violation. RSA 331-A holds brokers responsible for supervising their salespersons' compliance with trust account rules.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A trust account, also called an escrow account, is a separate bank account maintained by a broker to hold funds belonging to others, such as earnest money deposits, security deposits, or other client funds.
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.
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