Broker Diane's Virginia real estate firm receives an earnest money deposit of $8,000 in cash from a buyer. The buyer insists that the cash be held by Diane personally rather than deposited into the trust account until closing. What must Diane do under Virginia VREB regulations?
Correct Answer
B) Deposit the cash into the trust account within three banking days, regardless of the buyer's preference
Under 18 VAC 135-20-180, all client funds received by a broker, including cash, must be deposited into the trust account within three banking days of receipt. The preferences or instructions of the buyer do not override the broker's regulatory obligation to properly safeguard client funds in a trust account. Holding cash outside the trust account violates Virginia trust account rules regardless of the client's wishes.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Commingling is the illegal act of mixing client trust funds with a broker's personal or business operating funds; conversion is the misappropriation of those funds.
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