Idaho Real Estate Practice Exam

Who is in charge of the trust account money after the designated broker of a sole proprietor firm quits and the office closes?

1. The trust account manager appointed by the agency

2. The former designated broker

3. The first licensed employee at the agency

4. A legal guardian of the funds

The correct answer is: The former designated broker

The former designated broker is responsible for managing the trust account money after they quit and the office closes. This is because the designated broker holds a fiduciary duty to clients and is ultimately accountable for the funds in the trust account while they are under their supervision. When a designated broker resigns, the responsibility for the trust account does not automatically transfer to another party; it remains with the former designated broker until the funds are disbursed or otherwise properly accounted for. This ensures that there is a single point of accountability regarding the handling of client funds, which is crucial for maintaining trust in real estate transactions and ensuring that all parties are treated fairly. The other options do not reflect the correct protocol under these circumstances. A trust account manager, if appointed, would typically operate under the designated broker's authority, and if the firm has closed, the manager's role effectively ends. The first licensed employee does not have the authority to manage the trust account funds without proper designation. A legal guardian of the funds does not apply in this context, as such arrangements are not standard practice in real estate operations regarding trust accounts. This clear delineation of responsibilities helps maintain trust and compliance within the real estate industry.