Under RELA and SREC regulations governing escrow account management, which of the following practices would be IMPROPER?
Correct Answer
D) Depositing commission funds into the escrow account temporarily while awaiting disbursement instructions from the parties
Under RELA (63 P.S. §455.604) and 49 Pa. Code §35.326, escrow accounts must hold only client funds — money belonging to buyers, sellers, landlords, or tenants in connection with a real estate transaction. Depositing earned commission funds into the escrow account, even temporarily, constitutes commingling of the broker's own funds with client funds, which is a direct violation of RELA's escrow account requirements.
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More Pa Rela Brokerage Rules Questions
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Previous Question
Under RELA, a Pennsylvania broker, Craig, handles property management and receives both security deposits and monthly rent from tenants. Craig's bookkeeper accidentally deposits a tenant's $2,500 security deposit into the brokerage operating account instead of the escrow account. Craig discovers the error two days later. What should Craig do?
Next Question
Under RELA, a Pennsylvania broker wants to open an escrow account at a credit union instead of a traditional bank. Is this permissible?