A Tennessee broker is setting up trust account procedures for her new firm. Which of the following practices would be EXCEPT from constituting a violation of Tennessee trust account rules?
Correct Answer
A) Depositing the broker's own funds into the trust account to maintain a minimum balance for bank fee coverage
Under Tennessee TREC rules, a broker is permitted — and in fact encouraged — to maintain a small amount of personal funds in the trust account as a buffer to cover bank service charges and prevent the account balance from falling below the total of client fund balances. This practice is explicitly recognized as acceptable and does not constitute impermissible commingling when the amount is reasonable and documented.
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Related Topics & Key Terms
Key Terms:
Related Concepts
FREC has the authority to impose fines and other disciplinary actions on licensees who violate real estate laws and rules.
A group boycott is an illegal antitrust practice in which two or more competing real estate businesses agree to refuse to work with a specific person, company, or entity in order to harm that party's ability to compete.
In real estate, the distinction between an independent contractor and an employee determines tax treatment, liability, and the level of control a broker may exercise over the agent's daily activities. Most real estate agents operate as independent contractors.
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