Broker Martinez receives a buyer's $10,000 earnest money check on Friday afternoon. Before Martinez deposits the check, the seller rejects the offer on the following Monday morning — within the same business day the deposit would otherwise be due. What is the most appropriate course of action under New York DOS regulations?
Correct Answer
B) Return the undeposited check directly to the buyer, since the offer was rejected before the deposit was made
Under New York DOS regulations, a broker must deposit trust funds by the end of the next business day following receipt. When an offer is rejected before that deposit deadline has passed, the broker has not yet taken custody of the funds in a deposited form, and the contractual basis for holding the earnest money no longer exists. In this scenario, the rejection occurred Monday morning — the same business day the deposit would be due — meaning the deposit obligation and the rejection arose concurrently. DOS guidance permits the broker to return the original undeposited check directly to the buyer in this circumstance, as no trust account obligation was ever consummated. The broker should document the rejection and the return of the check in writing.
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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?
- → 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?
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