Broker Robert in Hoboken receives a buyer's earnest money deposit of $15,000 in cash. He is concerned about handling such a large cash deposit. Under New Jersey regulations, which of the following best describes Robert's obligations?
Correct Answer
D) Robert must deposit the cash into his escrow trust account within three business days and maintain proper records of the transaction
New Jersey regulations do not prohibit brokers from accepting cash deposits. Under N.J.A.C. 11:5-2.4, any funds received by a broker in connection with a real estate transaction — regardless of form — must be deposited into the escrow trust account within three business days and must be recorded in the individual client ledger. Robert must also be aware of federal Bank Secrecy Act requirements (FinCEN Form 8300 for cash transactions over $10,000), but from a New Jersey license law perspective, the primary obligation is timely deposit and proper record-keeping.
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Related Topics & Key Terms
Key Terms:
Related Concepts
License requirements are the mandatory qualifications—including pre-licensing education, examination, and background checks—that a person must satisfy before legally practicing real estate. These requirements are established and enforced by each state's real estate commission.
Market allocation is an illegal antitrust practice in which competing real estate brokerages agree to divide markets among themselves by geographic area, property type, or price range, thereby eliminating competition.
Price fixing is an illegal antitrust practice in which competing real estate brokerages agree to charge the same commission rates, fees, or other pricing for their services. It is a per se violation of the Sherman Antitrust Act.
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