Section 7. Dealing with the Funds in Contracts

Question 1

In the event of a dispute once funds are in a trust account:
a. Immediately remove funds from the account and distribute them back to the parties involved
b. All parties forfeit all funds unless they can come to an agreement
c. Hold money in trust account until there is oral consent from both parties, then deposit the funds with the clerk of courts
d. Hold money in trust account until there is written consent from both parties or deposit the funds with the clerk of courts

Answer 1

d. Hold money in trust account until there is written consent from both parties or deposit the funds with the clerk of courts

Question 2

Which of the following regarding a licensee’s responsibilities when acting as a courier of funds is FALSE:
a. Must safeguard the funds
b. May use funds as long as replaced entirely before delivered
c. Must deliver within 3 calendar days
d. Follow the directions of the buyer regarding funds up until they are delivered

Answer 2

b. May use funds as long as replaced entirely before delivered

Question 3

Regarding interest on Trust accounts:
a. Trust accounts can always earn interest
b. Interest always goes to the firm
c. Interest always goes to the client
d. Interest always goes to the broker

Answer 3

a. Trust accounts can always earn interest

Question 4

How should a provisional broker handle money:
a. All monies should be places in a trust account or with an escrow agent within 3 banking days
b. All monies should be places in a trust account or with an escrow agent immediately
c. All monies should be delivered to the BIC with whom they are affiliated within 3 banking days
d. All monies should be delivered to the BIC with whom they are affiliated immediately

Answer 4

d. All monies should be delivered to the BIC with whom they are affiliated immediately

Question 5

According to Rule A.0116(e), a broker may transfer funds out of a trust account to a closing attorney no more than:
a. 3 days prior to settlement
b. 5 days prior to settlement
c. 7 days prior to settlement
d. 10 days prior to settlement

Answer 5

d. 10 days prior to settlement

Question 6

Licensees are NOT able to accept custody of:
a. Settlement distribution to them or their firm
b. Earnest money to an escrow agent
c. Repair payments
d. Due diligence to the seller

Answer 6

c. Repair payments

Question 7

Which of the following regarding a licensee’s responsibilities when acting as a courier of funds is FALSE:
a. Must safeguard the funds
b. May use funds as long as replaced entirely before delivered
c. Must deliver within 3 calendar days
d. Follow the directions of the buyer regarding funds up until they are delivered

Answer 7

b. May use funds as long as replaced entirely before delivered