A licensed property manager in Virginia collects rent and security deposits on behalf of the owner of a 20-unit apartment complex. Under Virginia law and VREB regulations, how must the property manager handle these tenant funds?
Correct Answer
D) The funds must be maintained in a separate escrow or trust account and may not be commingled with the property manager's own funds.
Under Va. Code § 54.1-2108 and 18 VAC 135-20-180, all client funds — including rent and security deposits — must be maintained in a separate escrow or trust account. Commingling client funds with the licensee's personal or business funds is a serious violation of Virginia license law and grounds for disciplinary action by the VREB.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A trust account, also called an escrow account, is a separate bank account maintained by a broker to hold funds belonging to others, such as earnest money deposits, security deposits, or other client funds.
Advertising regulations govern how real estate licensees may market properties and services, requiring truthful, non-deceptive advertising that includes proper identification of the brokerage.
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.
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