Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

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Prepare for the Texas Real Estate SAE Exam with our educational quiz. Study using flashcards and multiple choice questions, each with detailed explanations to ensure you're ready to pass your exam!

Practice this question and more.

What does the law prohibit in regards to a license holder's funds?

Funding a personal account with business funds
Commingling funds with trust account funds
Using personal funds for client expenses
Keeping client checks in a personal account

The correct answer is: Commingling funds with trust account funds

The law specifically prohibits commingling funds with trust account funds due to the legal obligations real estate professionals have regarding the management of client funds. Trust accounts are designed to hold client funds separately from the license holder’s personal or business funds. This separation is critical to ensure that the client's money is protected and can be accounted for without any confusion or potential misuse. Commingling occurs when a license holder mixes personal or business funds with those that belong to clients, which can lead to legal and ethical issues. It may result in a breach of fiduciary duty, jeopardizing the trust between the license holder and the clients. Maintaining distinct records and accounts for both personal and client funds helps establish transparency, accountability, and proper financial management, which is both a legal requirement and a best practice in real estate transactions. This prohibition is fundamental to protecting consumers and maintaining professional integrity in real estate practices.