Leasing License Practice Exam

What is one requirement when escrow accounts are maintained?

1. Funds must be anonymous

2. Broker's funds can be mingled with client funds

3. A minimum amount may be kept to avoid bank service charges

4. All transactions must be cash

The correct answer is: A minimum amount may be kept to avoid bank service charges

One requirement when maintaining escrow accounts is that a minimum amount may be kept to avoid bank service charges. This ensures that the account remains active and does not incur unnecessary fees that can reduce the funds available for the purposes of the escrow. Maintaining a certain minimum balance helps to avoid the administrative burden and additional costs associated with maintaining the account, which could impact the funds set aside for the clients. This practice is important as it reflects the responsibility of brokers to manage escrow funds effectively while protecting the interests of all parties involved. Keeping a minimum balance helps ensure that the escrow account remains functional and accessible for transactions, thus facilitating the smooth operation of real estate or leasing transactions where these accounts are commonly used.