EstatePass
Practice of Real EstateMEDIUMFREE

FREC requires brokers to reconcile escrow accounts:

2:32
0 views

Question & Answer

Review the question and all answer choices

A

Weekly

A is incorrect because while weekly reconciliation might seem more diligent, FREC does not require this frequent reconciliation. Such a requirement would impose an unnecessary administrative burden on brokers without providing additional protection beyond monthly oversight.

B

Monthly

Correct Answer
C

Quarterly

C is incorrect because quarterly reconciliation would not meet FREC's requirements. This longer interval could allow discrepancies to persist undetected for up to three months, increasing the risk of improper fund handling and potential violations.

D

Annually

D is incorrect because annual reconciliation is insufficient to meet FREC's standards for escrow account management. Such infrequent oversight would not provide adequate protection for client funds and could lead to serious compliance issues.

Why is this correct?

B is correct because FREC specifically mandates monthly reconciliation of escrow accounts. This frequency ensures proper oversight of client funds while maintaining practical business operations, balancing compliance requirements with administrative efficiency.

Ready to Ace Your Real Estate Exam?

Access 2,000+ free video lessons covering all 11 exam topics.