Minnesota Real Estate Broker Exam — All Questions

When a Minnesota salesperson receives earnest money, the funds must be:

• a.Deposited into the salesperson's personal account until closing
• b.Delivered promptly to the broker to be held in the broker's trust account✓
• c.Held in cash by the salesperson until the seller accepts
• d.Sent directly to the county recorder

Client money such as earnest money must be handled through the broker's trust (escrow) account. A salesperson must deliver received funds promptly to the primary broker, and the broker may not commingle trust funds with business or personal accounts. Mishandling trust money is a serious violation of Minnesota license law and a frequent basis for discipline.

When a Minnesota property being sold is served by a water well, the seller must provide the buyer with a:

• a.Well Disclosure Statement identifying the location and status of each well✓
• b.Certified appraisal of the well's value
• c.New drilling permit from the Department of Commerce
• d.Ten-year warranty on the water quality

Minnesota requires a seller to provide a Well Disclosure Statement identifying the location and status of each well on the property, and sealed wells must be documented. This disclosure is tied to Minnesota's recording process and protects buyers and groundwater. The broker should confirm the well disclosure is completed so the transfer can be recorded without delay.

If a buyer and seller in a Minnesota sale dispute who is entitled to the earnest money held in trust, the broker should:

• a.Release the funds to whichever party asks first
• b.Split the earnest money equally without the parties' consent
• c.Move the funds into the broker's operating account for safekeeping
• d.Retain the funds in the trust account until the parties agree in writing or a court directs disbursement✓

When entitlement to trust money is disputed, the Minnesota broker must keep the funds in the trust account and may not unilaterally decide who receives them. The broker disburses only on the parties' written agreement or as directed through an authorized legal process, such as a court order or interpleader. Releasing or converting disputed funds without authority exposes the broker to discipline and liability.