California Real Estate Broker ExaminationPractice of Real Estate and Mandated DisclosuresHard
A real estate broker is managing a property for an owner. The broker collects rent from tenants and pays for property expenses from a trust account. According to California Real Estate Commissioner's Regulations, what is the maximum amount of the broker's own funds that can be kept in the client's trust account to cover bank charges or maintain minimum balance requirements?
- A$1,000
- B$100
- C$500
- D$200
Show answer & explanationAnswer & explanation
Correct answer: D. $200
California Real Estate Commissioner's Regulation 2832 specifies that a real estate broker may have up to $200 of their own funds in a client's trust account. This amount is strictly for the purpose of covering bank charges or maintaining a minimum balance, preventing the account from being debited below zero due to fees.
Why the other options are wrong
- A. $1,000 significantly exceeds the maximum allowed amount by regulation.
- B. $100 is too low; the regulation allows more.
- C. $500 exceeds the maximum allowed amount by regulation.
CA Trust Account Broker's Funds
California regulations permit a real estate broker to keep a maximum of $200 of their personal funds in a client trust account to cover bank charges or maintain a minimum balance.
- Maximum of $200.
- Only for bank charges or minimum balance.
- Prevents commingling for other purposes.
Memory trick: Trust funds are sacred, keep them sealed, only a small fee can be revealed.