Principal Broker Linda operates a brokerage in Portland and maintains a trust account for client funds. She deposits a $10,000 earnest money check from buyer Tom into the trust account. Under Oregon law, which of the following statements about this trust account is correct?
Correct Answer
A) Linda must keep Tom's earnest money in a separate trust account and may not use it for any brokerage operating expenses
Under ORS 696.241 and OREA rules, a Principal Broker must maintain a separate trust account for all client funds and must never commingle those funds with brokerage operating funds or personal funds. The earnest money must remain in the trust account until the transaction closes, is cancelled, or is otherwise properly disbursed. Using trust funds for operating expenses is a serious violation.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Florida brokers are required to maintain transaction records and escrow records for a minimum of five years.
A tie-in arrangement is an illegal antitrust practice in which a seller conditions the purchase of one product or service on the buyer's agreement to purchase a separate product or service.
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