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.
Study Guide
License Law
Key concepts and exam tips →
Practice
NY Real Estate License Law
Free sample questions →
Preparing for the NY Real Estate Exam?
Unlocked covers Trust Account and every other concept on the NY Real Estate Salesperson Exam — with study modules, practice questions, spaced-repetition flashcards, and Carl, your AI study buddy.
click for a haiku!