Tennessee Real Estate License Exam Practice Question
An affiliate broker has begun handling property management activities for the brokerage. Where MUST the rent money and deposit money be kept for the property owners?
Correct Answer: C
Rationale: All money held for the benefit of others, such as rent and deposit money, must be deposited in the principal broker's trust or escrow account to ensure proper handling and protection of clients' funds. This requirement safeguards against misappropriation and maintains financial transparency.
Option A is incorrect as it allows funds to be kept in the affiliate broker's personal account, violating trust fund regulations. Option B misplaces the handling of rent and deposit funds, as sending rent directly to the owner bypasses the necessary oversight. Option D is wrong because operating accounts are not designed for client funds, risking potential misuse.
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