Rules E

Question 1

E-1 - 1.

Answer 1

• money belonging to others shall be deposited in one or more accounts separate from other money belonging to the broker or brokerage
• money must be deposited in a separate escrow account, according to transaction’s purpose
• maintain a copy of the deposit agreement

Question 2

E-1 - 1. a-e

Answer 2

a. accounts in name of business entity only
b. accounts in name of employing broker only
- maintenance of the trust accounts is responsibility of
the employing broker
c. escrow funds must be available immediately without penalty (not invested ili oroceni…)
e. commingling prohibited
- broker’s personal funds can’t be commingled with
money from another, except that enough money be
deposited to maintain an open account
- escrow accounts can’t be used to deposit broker’s
money except following an executory sales contract

Question 3

E-1 - 4.

Answer 3

Money advanced by broker for benefit of another may be placed in the trust account and identified as am advance, but withdrawn by broker only.

Question 4

E-1 - 5.

Answer 4

Separate trust accounts must be maintained when broker receives funds of others for RE partnership, joint ventures and syndications.

Question 5

E-1 - 6.

Answer 5

In the absence of a specific written agreement to the contrary:
- commissions, fees or charges collected by a broker for performing any service on behalf of another are considered “earned”.

Monies are available for use by the broker:

• after all contracted services are performed
• when there is no remaining right of recall by others

Question 6

E-1 - 6 g

Earnest money on new construction

Answer 6

If a broker who is also acting as a builder receives deposit money, the deposit money must be placed in a trust account and not used for construction purposes unless the written consent of the purchaser is secured.

Question 7

E-1 - 6 h

Separate escrow accounts required for managing 7 or more properties

Answer 7

Broker managing lass the 7 single family residential units may deposit rental receipts or security deposited in the “sales escrow” account.

Question 8

E-1 - 6 l
Earnest money (EM)

Answer 8

• EM checks should be identified in CBS (contract buyer seller)
• may be withheld for payment if disclosed in the CBS or by seller’s written instructions
• promissory notes used as EM must be identified in the CBS
• note’s due dates must be stated in contract or by attaching a copy of the note to the contract to inform Seller.

Question 9

E-1 - 6 m

Time limits for deposit of money belonging to others

Answer 9

• money received by broker as property manager must be deposited into escrow or trust no later than FIVE business days following receipt (lease)
• all other money received by a broker must be deposited into escrow or trust na later than THREE days following receipt (sales)

Question 10

E-1 - 6 p&q
Diversion/Conversion prohibited
&
Items in lieu of cash

Answer 10

• money belonging to a beneficiary of trust account can’t be used for another beneficiary of a different trust account
• anything of value taken in lieu of cash shall be held by the broker, unless agreed otherwise.

Question 11

E-1 - 6 t

Number of separate accounts may vary from zero to unlimited

Answer 11

• broker isn’t limited to the number of separate accounts

- no trust account is needed if Broker isn’t going to receive money from a third party