The most common violations of this section found in audits relate to Commissioner’s Regulation 2832(a), which requires that a broker place funds accepted on behalf of another into the hands of the owner of the funds, into a neutral escrow depository or into a trust fund account in the name of the broker, or in a fictitious name if the broker is the holder of a license bearing such fictitious name, as trustee at a bank or other financial institution not later than three business days following receipt of the funds by the broker or by the broker’s salesperson. Two of the most common problems related to this regulation are:
- A broker’s failure to designate accounts receiving trust funds as trust fund accounts in the name of the broker or broker’s dba as trustee; and
- Failure to deposit trust funds received by a broker or broker’s employee into a trust fund account within three business days of receipt.
Other violations of this section relate to a broker’s use of an improper interest-bearing account {Regulation 2832(b)}, a broker’s failure to place checks received from an offeror into a neutral escrow depository or trust fund account in a timely manner following acceptance of an offer {Regulations 2832(c & d)} and failure of a broker acting as an escrow holder in a transaction in which the broker is performing acts for which a real estate license is required to place trust funds received as required not later than the next business day following receipt of the funds {Regulation 2832(e)}.
If you have been subject to a DRE audit, and found yourself accused of violating any of the Regulations, be sure to call us at Hanson Law Firm. We may be able to help you. Or not.
