Under Rhode Island law, a broker's trust account must be used to hold:
Correct Answer
B) Client funds such as earnest money and security deposits
Under Rhode Island license law, a broker is required to maintain a separate trust (escrow) account to hold client funds, including earnest money deposits and security deposits. These funds must be kept separate from the broker's personal and business operating funds. Commingling client funds with the broker's own money is a violation of Rhode Island law.
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Related Topics & Key Terms
Related Topics:
Key Terms:
Related Concepts
Antitrust violations in real estate occur when competing brokerages or agents engage in practices that restrain trade, reduce competition, or harm consumers through collusion. These violations are governed by the Sherman Antitrust Act and can result in severe penalties.
Broker supervision is the legal obligation of a designated or managing broker to oversee and be accountable for the real estate activities of all salespersons and associate brokers operating under their license.
Commingling is the illegal act of mixing client funds with a broker's personal or business operating funds, while conversion is the unauthorized use of client funds for the broker's own benefit. Both are serious violations that can result in license revocation.
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