Trust Funds (California) Real Estate Test 2023 with
complete solution
Which of the following best describes a trust fund?
A: Money or things of value that are received by a broker or salesperson on behalf of a
principal or other person
Not:
Accounts that are used to pay for third-party closing costs such as house or pest
inspections
A title or escrow company, an attorney, or a financial institution that holds good faith
deposits
Rents and deposits derived from rental property owned by the broker, the brokerage, or
the salesperson
Which one of the following is NOT considered to be trust funds?
A: Rent from a tenant of the licensee's rental property
Not:
Deposit checks made payable to a title company
Fees for a brokerage service to be performed in the future
A promissory note held as part of a property purchase price
A buyer's check held uncashed by the broker before acceptance of the offer can be held
uncashed after the acceptance of the offer only
A: upon written authorization from the seller.
NOT:
when the seller's broker does not have a trust fund account.
until a neutral depository is selected by the seller.
if the buyer requests the check to remain uncashed.
Trust funds are handled according to which fiduciary duty?
A: Accounting
Not:
Care
Loyalty
Obedience
A licensee must deposit trust funds into a neutral escrow account, into a brokerage trust
account, or give them to the fund's owner within __________ of receipt.
three business days
, A licensee can hold a check uncashed that has been received in connection with an
offer to purchase real estate if the seller has been told the check will be held uncashed
and
the buyer instructs the licensee in writing to hold the check uncashed until the
acceptance of the offer.
Which of the following meets the definition of a trust fund?
Rents collected for an owner's rental property managed by a licensee
NOT:
The broker's personal funds
Commissions earned after the closing of a real estate transaction
Funds used to pay for brokerage operations (rents, utilities, etc.)
After the seller's acceptance of an offer to purchase, how may a buyer retrieve their
good faith deposit from the seller?
Only by written authorization and approval from the seller
A good faith deposit received from a buyer prior to the acceptance of the offer belongs
to
the buyer.
A neutral depository can be a title or escrow company, an attorney, or
a financial institution.
Definition:
A neutral depository can be a title or escrow company, an attorney, or a financial
institution.
Which is an improper accounting procedure when receiving advance fees?
Depositing them into and disbursing them from the office business account
Commissions or other fees owed to the broker from the trust account
must be withdrawn within 25 days of being earned.
Once trust funds have been deposited into a trust account, the funds can only be
withdrawn upon the signature of
A: Any of the above
Not: the designated broker-officer if the trust account is in the name of corporate broker
the broker in whose name the account is maintained
a salesperson licensed to a broker if properly authorized in writing to do so
Which is NOT accomplished by maintaining a trust account for funds received?
Answer: A trust account protects a client from a dishonest broker
Not:
Funds cannot be frozen pending litigation against the broker
A trust account provides the DRE with easy audit access to client trust funds being held
complete solution
Which of the following best describes a trust fund?
A: Money or things of value that are received by a broker or salesperson on behalf of a
principal or other person
Not:
Accounts that are used to pay for third-party closing costs such as house or pest
inspections
A title or escrow company, an attorney, or a financial institution that holds good faith
deposits
Rents and deposits derived from rental property owned by the broker, the brokerage, or
the salesperson
Which one of the following is NOT considered to be trust funds?
A: Rent from a tenant of the licensee's rental property
Not:
Deposit checks made payable to a title company
Fees for a brokerage service to be performed in the future
A promissory note held as part of a property purchase price
A buyer's check held uncashed by the broker before acceptance of the offer can be held
uncashed after the acceptance of the offer only
A: upon written authorization from the seller.
NOT:
when the seller's broker does not have a trust fund account.
until a neutral depository is selected by the seller.
if the buyer requests the check to remain uncashed.
Trust funds are handled according to which fiduciary duty?
A: Accounting
Not:
Care
Loyalty
Obedience
A licensee must deposit trust funds into a neutral escrow account, into a brokerage trust
account, or give them to the fund's owner within __________ of receipt.
three business days
, A licensee can hold a check uncashed that has been received in connection with an
offer to purchase real estate if the seller has been told the check will be held uncashed
and
the buyer instructs the licensee in writing to hold the check uncashed until the
acceptance of the offer.
Which of the following meets the definition of a trust fund?
Rents collected for an owner's rental property managed by a licensee
NOT:
The broker's personal funds
Commissions earned after the closing of a real estate transaction
Funds used to pay for brokerage operations (rents, utilities, etc.)
After the seller's acceptance of an offer to purchase, how may a buyer retrieve their
good faith deposit from the seller?
Only by written authorization and approval from the seller
A good faith deposit received from a buyer prior to the acceptance of the offer belongs
to
the buyer.
A neutral depository can be a title or escrow company, an attorney, or
a financial institution.
Definition:
A neutral depository can be a title or escrow company, an attorney, or a financial
institution.
Which is an improper accounting procedure when receiving advance fees?
Depositing them into and disbursing them from the office business account
Commissions or other fees owed to the broker from the trust account
must be withdrawn within 25 days of being earned.
Once trust funds have been deposited into a trust account, the funds can only be
withdrawn upon the signature of
A: Any of the above
Not: the designated broker-officer if the trust account is in the name of corporate broker
the broker in whose name the account is maintained
a salesperson licensed to a broker if properly authorized in writing to do so
Which is NOT accomplished by maintaining a trust account for funds received?
Answer: A trust account protects a client from a dishonest broker
Not:
Funds cannot be frozen pending litigation against the broker
A trust account provides the DRE with easy audit access to client trust funds being held
