Elena is a designated broker in Washington whose firm holds $42,000 in client earnest money deposits. She learns that the firm's trust account bank has begun charging a $25 monthly service fee, which is being deducted directly from the trust account balance. What is Elena's best course of action to remain compliant with Washington trust account rules?
Correct Answer
B) Deposit firm funds into the trust account in an amount sufficient to cover the bank fees
Washington law (WAC 308-124D) permits a designated broker to maintain a small amount of firm funds in the trust account specifically to cover bank service charges, provided those funds are clearly documented as firm funds. This is one of the narrow exceptions to the commingling prohibition. Elena should deposit sufficient firm funds to cover the monthly fee so that client funds are never reduced by bank charges, thereby protecting the full amount of client deposits.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Market allocation is an illegal antitrust practice in which competing real estate brokerages agree to divide markets among themselves by geographic area, property type, or price range, thereby eliminating competition.
Price fixing is an illegal antitrust practice in which competing real estate brokerages agree to charge the same commission rates, fees, or other pricing for their services. It is a per se violation of the Sherman Antitrust Act.
Florida brokers are required to maintain transaction records and escrow records for a minimum of five years.
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