Under New York DOS regulations, a licensed broker maintaining a trust account for client funds is required to use which type of account, and what restriction applies to interest earned?
Correct Answer
C) A non-interest-bearing escrow account at a federally insured institution; the broker may not profit from interest on client funds
Under NY DOS regulations (19 NYCRR §175.1) and Real Property Law §439-a, brokers are required to deposit client funds into a separate, non-interest-bearing escrow account at a federally insured bank or trust company. Brokers are prohibited from commingling client funds with personal or operating funds and may not profit from those funds. Because the account must be non-interest-bearing, the question of distributing interest to clients does not arise under standard NY broker trust account rules — the regulatory requirement is to use an account structured to prevent any interest accrual that could benefit the broker.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Spot zoning is an illegal or improper rezoning of a small parcel of land that is inconsistent with the surrounding zoning and the comprehensive plan. It benefits an individual owner rather than the community as a whole.
Subdivision regulations are local government rules that control the division of land into smaller parcels for development or sale. They ensure proper infrastructure, lot sizes, and public improvements are provided.
A variance is an authorized deviation from the existing zoning ordinance granted to a property owner who demonstrates unique hardship. It allows a use or structure that would otherwise violate the current zoning rules.
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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?
- → Broker Martinez holds an active NY broker license and operates a principal office. She opens a branch office managed day-to-day by Associate Broker Thompson. A competing broker claims Martinez is violating DOS regulations because the branch office lacks proper licensing. Which of the following best evaluates this claim?
- → A prospective salesperson candidate completed portions of the required 77-hour pre-licensing curriculum at two separate DOS-approved real estate schools. Under NY DOS regulations, which statement best describes the candidate's examination eligibility?
- → 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?
- → A salesperson has completed 20 of the required 22.5 hours of continuing education before her license renewal deadline. Which of the following would satisfy her remaining 2.5-hour requirement?
- → 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?
- → A New York broker receives client money that must be held separately from the broker's own operating funds. What type of account must the broker use under the DOS rule?
- → A New York applicant is selecting a path to complete the 77-hour pre-licensing requirement. Which listed method is not acceptable under New York law?
- → Maria, a New York real estate salesperson, received her license in January 2024. Her license is set to expire in January 2026. She has completed 18 hours of continuing education courses. How many additional CE hours must she complete to satisfy New York's renewal requirements?
- → Steven Garcia completed 18 hours of continuing education during 2025 and 2026. His license expires December 31, 2026. On December 20, 2026, he registers for a 6-hour course scheduled for January 10, 2027. What is his renewal status?
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