License Law
A separate bank account where a broker holds client funds, keeping them segregated from the broker's personal or business money.
A trust account (also called an escrow account) is a bank account maintained by a real estate broker specifically for holding client funds such as earnest money deposits, security deposits, and rent payments. In New York, RPL Article 12-A requires brokers to maintain trust accounts separate from their personal or business operating accounts. The broker must keep detailed records of all deposits and withdrawals. Failure to maintain a proper trust account, or mixing client funds with personal funds (commingling), is a violation that can result in license suspension or revocation.
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