New York — Business Practices & Escrow (19 NYCRR 175) — New York Real Estate — State Law Practice Test
16 questions in this topic · 16 drawn at random this round
Interest accrues on earnest money a New York broker holds in the §175.1 special bank account. Under §175.1, who is the interest for?
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This New York Real Estate — State Law New York — Business Practices & Escrow (19 NYCRR 175) practice set has 16 practice questions based on the official exam materials, each with an instant explanation.
Sample questions
Three questions from the New York — Business Practices & Escrow (19 NYCRR 175) bank with the correct answer and an explanation. The practice quiz above draws 16 questions at random from the same bank.
Under 19 NYCRR §175.1, may a New York real estate broker deposit a buyer's earnest-money check into the broker's own personal or general business checking account?
- No — commingling a principal's money with the broker's own funds is prohibited — Correct answer
- Yes, as long as the broker keeps a written ledger of the amount
- Yes, if the broker returns the exact amount at closing
- Yes, but only for deposits under $1,000
Explanation: No. §175.1 forbids a broker from commingling the money of a principal with the broker's own funds; the deposit money must go into a separate account, not the broker's personal/business account. Commingling（混同）: mixing a client's funds with the broker's own money, which §175.1 prohibits. (19 NYCRR §175.1)
Handbook: New York Business Practices — commingling prohibited (19 NYCRR §175.1)
What kind of bank account does 19 NYCRR §175.1 require a New York broker to maintain for funds held on behalf of a principal?
- A separate, special bank account used exclusively for the principal's deposits — Correct answer
- The broker's regular operating account, with sub-totals noted
- An interest-bearing account titled in the broker's personal name
- Any account at the listing agent's discretion
Explanation: §175.1 requires the broker to maintain a separate, special bank account used exclusively for the deposit of a principal's monies (an escrow/trust account). Special bank account（专用银行账户/托管账户）: a dedicated escrow account holding only client funds, separate from the broker's own money. (19 NYCRR §175.1)
Handbook: New York Business Practices — separate special bank account / escrow (19 NYCRR §175.1)
Within what time does 19 NYCRR §175.1 require a New York broker to deposit a principal's money into the special bank account?
- Within three business days — Correct answer
- Within thirty calendar days
- By the closing date of the transaction
- Within twenty-four hours of receipt
Explanation: §175.1 requires the deposit to be made within three business days. Until deposited the funds must be safeguarded in a secure place to prevent loss or misappropriation. Three business days（三个营业日）: the §175.1 deadline for placing a principal's money into the escrow account. (19 NYCRR §175.1)
Handbook: New York Business Practices — escrow deposit timing (19 NYCRR §175.1)