A broker's trust account holds $15,000 in client deposits. The bank assesses a $200 monthly service charge on the account. Under New York DOS regulations, which of the following best describes how the broker must handle this charge?
Correct Answer
B) Pay the charge from the broker's business operating account, and may also maintain a small amount of personal funds in the trust account solely to cover such charges
Under 19 NYCRR 175.1, client funds held in a trust account may not be used to pay business expenses such as bank service charges. The broker must cover these costs from personal or business operating funds. Importantly, the regulation does permit a broker to maintain a nominal amount of personal funds in the trust account for the specific purpose of covering bank service charges — this is the one recognized exception to the prohibition on commingling — provided the amount is kept to the minimum necessary for that purpose.
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Related Topics & Key Terms
Key Terms:
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- → Under New York Department of State fee schedules, what is the fee required to sit for the real estate salesperson licensing examination?
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- → Amanda completed her 77-hour pre-licensing course in January 2024. She is now ready to take her exam in March 2026. Is her education still valid?
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- → A New York salesperson wants to open an independent brokerage office without associating with a sponsoring broker. Which licensing distinction determines whether that is permitted?
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