Montana Real Estate Broker Exam — All Questions

Absent a different agreement by the parties, a Montana broker must deposit money belonging to others into a trust account within:

• a.one business day
• b.three business days✓
• c.five business days
• d.ten business days

ARM 24.210.427(4)(d), the trust-account rule adopted effective 21 February 2026 in place of the repealed ARM 24.210.426, requires brokers to 'deposit monies belonging to others into a trust account within three business days, unless otherwise agreed to by the parties.' Where the funds instead go to a third party, ARM 24.210.427(1) requires the broker to obtain and retain documentation that the third party received them. Ten business days is a real deadline in the same rule but for the opposite direction of travel: under ARM 24.210.427(6)(b) money in the trust account that is due and payable to the broker must be withdrawn within ten business days once due. The other periods correspond to nothing in the rule. The account itself must be liquid, readily accessible, insured in a Montana financial institution, identified as a trust account, and reconciled each month having activity, and the broker may hold no more than $1,000 of personal funds in it under ARM 24.210.427(6).

A Montana broker is moving the brokerage office to a new building. The broker must notify the department:

• a.before the move or within 10 days after it✓
• b.before the move or within 30 days after it
• c.within 10 days after the new lease is signed
• d.at the next renewal of the broker's license

Section 37-51-308(3), MCA provides that 'in case of removal from the designated address, the broker shall notify the department before removal or within 10 days after removal, designating the new physical address and paying the required fee,' after which the department issues a license for the new location for the unexpired period. The obligation is tied to the removal itself rather than to the lease signing, so a broker who signs a lease months ahead and moves later still measures the ten days from the move. Thirty days is not the figure this section uses. And waiting for renewal would leave the board's record of the broker's designated address wrong in the meantime, which matters because 37-51-308(1) requires a licensed broker to maintain a designated physical address where the license is prominently displayed and requires that address to appear on the license. A supervising broker has a further display duty under 37-51-308(2)(a): a copy of the current license of each associated salesperson must be posted at that address.

How long must a Montana licensee keep trust account records and real estate transaction documents?

• a.Three years from the closing date of the transaction
• b.Five years from receipt or completion, whichever is later
• c.Eight years from receipt or completion, whichever is later✓
• d.Ten years from the date the documents were created

ARM 24.210.414, adopted effective 23 August 2025 when the retention provision moved out of the repealed ARM 24.210.601, requires licensees to 'maintain trust account records and real estate related documents for eight years from the date of receipt or the date the transaction was completed, whichever is the latest, including sales contracts, offers, leases and options, agency agreements, and closing statements.' Two details decide the question: the period is eight years, and it runs from the later of receipt or completion rather than from the closing alone, so a document received after closing extends the clock. Three years appears elsewhere in the scheme — ARM 24.210.607(1)(b)(ii) obliges a supervising broker to document a former salesperson's transactions for the three years preceding a request — and the other periods correspond to nothing in the board's rules. Records may be kept electronically provided they are maintained so as to facilitate auditing, per ARM 24.210.427(8).

A Montana broker wants to send earnest money to the closing agent a week before closing. The broker may do so if the broker has:

• a.the written instruction of the party who deposited the funds
• b.the closing agent's written receipt for the transferred funds
• c.the supervising broker's written approval of the early transfer
• d.the written agreement of the buyers and the sellers✓

ARM 24.210.427(9) keeps trust funds in the account 'until the transaction is closed or terminated; however, trust funds may be disbursed to the closing agent in anticipation of closing upon written agreement of the buyers and sellers.' Both sides must agree in writing, because until closing the money's destination is still contested territory — this is the same logic that makes ARM 24.210.427(11) bar a broker from treating earnest money as commission until the transaction has closed or terminated, and require any division of forfeited earnest money between broker and seller to rest on a written agreement. The depositing party's instruction alone will not do, and a receipt from the closing agent documents the transfer after the fact rather than authorizing it. Internal approval addresses supervision, not the parties' rights in their own funds. A related client-instruction rule sits at ARM 24.210.427(10): at a client's instruction, funds otherwise due and payable may stay in the trust account even where no agreement is in existence or the transaction has terminated.

A Montana broker holding a client's earnest money must:

• a.Hold it in a separate trust account✓
• b.Keep it in cash in the office safe
• c.Apply it toward the firm's advertising costs
• d.Deposit it in the broker's personal account

ARM 24.210.427(1) requires brokers who receive any monies on behalf of other persons to deposit the funds in a trust account and maintain the account under that rule, and ARM 24.210.427(2) requires the account to be liquid, readily accessible, insured in a Montana financial institution, identified as a trust account, and reconciled each month having activity. Cash in an office safe fails that test even if nobody spends it, because undeposited currency leaves no bank record and nothing to reconcile. Putting the money in the broker's personal account inverts the rule that permits at most $1,000 of the broker's own funds inside the trust account under ARM 24.210.427(6). Spending it on the firm's advertising is worse still: 37-51-321(1)(e) makes failing to account for or to remit money belonging to others unprofessional conduct, and ARM 24.210.427(11) bars a broker from taking any part of earnest money as commission until the transaction has closed or terminated. Failing to comply with trust account maintenance requirements also draws a citation carrying a $50 civil fine for each cited violation under 37-51-324(3).

In Montana, a supervising broker who fails to oversee an affiliated salesperson's compliance with agency and trust-account rules may be:

• a.Insulated from discipline because the salesperson acted alone
• b.Excused where the salesperson is an independent contractor
• c.Liable only if a client brings a civil suit against the firm
• d.Subject to discipline for failing to supervise the salesperson✓

Supervision is itself a licensed duty in Montana. ARM 24.210.641(1)(uu) makes it unprofessional conduct to be "failing as a supervising broker to adequately supervise his or her salespeople", and adds that a supervising broker endorsement may be limited or revoked as a consequence — so the failure is an independent disciplinary offense, not merely a defense the salesperson can raise. Independent-contractor status does not remove the duty: ARM 24.210.605 requires reasonable supervision of salespersons with two or more years of experience, including a written office policy, auditing transaction files, regular training, and reviewing all advertising, and ARM 24.210.606 requires a high level of supervision, including monitoring transactions from contract to closing, for salespersons with less than two years of experience or fewer than ten transaction sides in a calendar year. Nothing conditions board discipline on a client's civil suit; a complaint may be submitted to the department under 37-1-308(1), and the board may impose any sanction in 37-1-312. Acting as a supervising broker at all requires a valid active Montana broker license and a supervising broker endorsement under 37-51-301(2).