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CA RE Broker · Cheat Sheet
Broker Supervision
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Cheatsheet: Broker Supervision, Trust Accounts & Record Keeping
Trust Account Rules at a Glance
| Rule | Detail | |
| Account title | "[Broker Name], Real Estate Broker, Trust Account" | |
| Bank requirement | Federally insured (FDIC/NCUA) | |
| Earnest money deadline | Deposit within 3 business days of acceptance | |
| Broker's own funds | Only the minimum to maintain required bank balance | |
| Reconciliation | Monthly — bank balance must match sum of all client ledgers | |
|---|---|---|
| DRE audit rights | Any time, no advance notice required | |
| Disputed funds | Hold; get mutual release OR file interpleader with court | |
| Violation | Definition | Consequence |
| Commingling | Mixing client funds with personal/business funds | DRE discipline, fines |
| Conversion | Using client funds for personal/business expenses | License revocation + criminal charges |
| Record Type | Retention Period | |
| Transaction records (contracts, disclosures, correspondence) | 3 years from closing | |
| Trust account records | 3 years | |
| Employment agreements (salespersons) | 3 years after relationship ends | |
| Advertising copies | 3 years | |
| Property management records | 3 years from end of management | |
| Mandatory Topic | Hours | |
| Ethics | 3 | |
| Agency | 3 | |
| Trust Funds | 3 | |
| Fair Housing | 3 | |
| Risk Management | 3 | |
| Consumer Protection | 3 | |
| Electives | 30 | |
| Total | 45 | |
| CAN (Administrative) | CANNOT (Licensed Activity) | |
| Schedule appointments | Show property | |
| Prepare ad copy (for agent review) | Negotiate price or terms | |
| Answer phones | Explain disclosures | |
| Deliver documents | Solicit listings or buyers | |
| Enter MLS data under supervision | Receive transaction-based compensation |
Referral Fees Quick Rules
- Pay ONLY to licensed real estate agents
- Out-of-state referrals: pay a licensed CA broker, who refers the client
- Unlicensed finders/"bird dogs": ILLEGAL
- RESPA §8: No kickbacks from title, escrow, or lenders on federally related loans
Property Management Trust Accounts
- Separate account from sales trust account (required)
- Security deposits: separate ledger from rental income
- Return security deposit within 21 days of lease termination with itemized statement
- Monthly accounting to property owners per management agreement
Aligned to the California DRE broker exam content outline.
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