Under Washington DOL rules, which of the following types of accounts is acceptable for holding earnest money received by a real estate firm?
Correct Answer
C) A dedicated trust account maintained by the firm at a federally insured financial institution
Under RCW 18.85 and WAC 308-124D, earnest money and other client funds must be held in a dedicated trust account maintained at a federally insured financial institution. The trust account must be separate from all personal and business operating accounts and must be designated as a trust or escrow account. This requirement protects client funds and ensures they are not commingled with the firm's own money.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Specific performance is a court-ordered remedy that compels the breaching party to fulfill their obligations under the contract rather than simply paying monetary damages. It is an equitable remedy used when monetary damages would be inadequate.
The Statute of Frauds is a legal requirement that certain types of contracts must be in writing and signed to be enforceable. In real estate, all contracts for the sale of land or interests in land must be in writing.
A time is of the essence clause in a contract means that all deadlines and dates specified in the agreement are strictly enforceable, and failure to meet them constitutes a material breach.
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