Louisiana Real Estate Broker Exam — All Questions

A Louisiana broker who receives a client's deposit money must:

• a.Place it in a designated sales escrow/trust account separate from operating funds✓
• b.Deposit it into the broker's general business account
• c.Keep it in a personal safe deposit box until closing
• d.Forward it immediately to the LREC for holding

Louisiana brokers must deposit client and customer money, such as deposits, into a designated sales escrow (trust) account kept separate from the broker's business and personal funds. Commingling trust money with operating funds, or converting it to the broker's use, is a serious violation of Louisiana license law. The broker, not the salesperson, is accountable for proper trust-account handling.

When a Louisiana salesperson receives an earnest-money deposit, the salesperson should:

• a.Hold it personally until the seller accepts the offer
• b.Deposit it into the salesperson's own account
• c.Endorse it over to the buyer's attorney
• d.Deliver it promptly to the sponsoring broker for deposit into the trust account✓

A salesperson has no authority to hold client funds; deposits must be delivered promptly to the sponsoring broker, who places them in the firm's escrow/trust account. This preserves the broker's supervisory responsibility over trust money and prevents commingling. Mishandling deposits is a frequent basis for LREC discipline.

If a dispute arises between a buyer and seller over who is entitled to escrowed deposit money, a Louisiana broker generally should:

• a.Release the funds to whichever party contacts the broker first
• b.Retain the funds in escrow until the parties agree in writing or a court or authorized process directs disbursement✓
• c.Split the deposit equally between the parties without their consent
• d.Transfer the funds to the broker's operating account for safekeeping

When entitlement to escrowed funds is disputed, the broker must keep the money in the trust account and may not unilaterally decide who gets it. The broker disburses only on the parties' written agreement or as directed through an authorized legal process. Releasing or converting disputed funds without authority exposes the broker to license discipline and civil liability.