Broker Paul manages 12 rental properties in Virginia. He collects security deposits from tenants on behalf of the property owners. Under Virginia law, how must Paul handle these security deposits?
Correct Answer
A) He may hold security deposits in the same trust account as sales transaction earnest money deposits
Under Virginia law and VREB regulations, security deposits collected by a property manager are client funds that must be held in a trust account. Virginia regulations do not require that security deposits be maintained in a separate trust account from other client funds such as earnest money; a single properly maintained trust account may hold various types of client funds. The key requirement is that all such funds be kept in a trust account, not commingled with the broker's own funds.
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Related Topics & Key Terms
Key Terms:
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