Trust Funds

Renewed 2016

Trust Funds

A three hour continuing education course approved by the California Bureau of Real Estate (CalBRE) to meet the requirements of the Business and Professions Code Section 10153.4 and 10170.5.

Author: Don Blazej Publisher: CyberCE, Barry Caudill Publisher

General Information Page (This is provided to you in accordance with standards set by the California Bureau of Real Estate – CalBRE) Course Provider: CyberCE

Web Site Address: www.cyberce.biz

CalBRE Sponsor ID ____4331_____ Phone #: 800-310-3421 Fax #: 928-754-4164 Mailing Address: P.O. Box 1876 Bullhead City, AZ 86430

EMAIL Address: [email protected]

Course Title and Description: * Trust Funds– A three-hour course in Trust Fund Handling providing knowledge of the legal requirements for receiving and handling trust funds in real estate transactions, as set forth in the Rea Estate Law and the Regulations of the Real Estate Commissioner. Topics included are: -

Identifying Trust Funds and the owners of Trust Funds Proper handling of Trust Funds Trust Fund Bank Accounts Record keeping, Accounting and reconciliation Commingling and Conversion

Method of Course Presentation: Online access via Internet Course Category: Trust Funds Credit Hours: 3 Course Fee: $25.00 Course Outline: Title: Author: Copyright Date: Pages: Edition:

Trust Funds Don Blazej NA 31 Updated February 2014

Refund Policy: The student has a right to cancel with a full refund of all charges up to ten (10) days after enrollment. Refunds for cancellations will be paid within 30 days. Refunds are not provided if the final exam has been accessed or if we have issued a certificate of completion. If a student purchases a book or other printed material, there will be no refund for such printed materials once they have been sent. Final Examination: The Final Exam consists of 15 Multiple Choice Questions. The exam will be a timed exam with 15 minutes allotted for completion. The minimum passing grade is 70% correct answers. A second version of the Exam will be available to a student that fails the first exam. The second exam will also be 15 multiple choice questions, at least 90% different from the first exam. Completion Policy: The course is a 3-hour course and the course outline will be offered in sections with incremental assessments (quizzes) offered after each section. Each section will be timed such that the total time spent on the course, including the final exam, will be equivalent to the 3-hours. A student will not be able to go to the next section before completing the incremental assessment and until the requisite time has passed. A student must complete the course within one year from the date first enrolled. If the final exam is not completed within one year, the course will expire and no credit will be given. To continue with the course, a student will have to re-enroll and pay an additional fee.

CyberCE General Information Page Page Two If a student fails the course after taking the second final exam the student must re-enroll in the course; there is no additional fee as long as the student is within the one year term of signing up but the course still must be completed within one year of the initial enrollment. Internet Course Identification Statement: A student registering for this course must provide a valid CalBRE License number along with a valid email address. To access course materials the student must log in with a “user name” and “password” created upon registration. Prior to taking the final exam, the student must enter their valid California Drivers License Number below the following statement: “By entering my valid California Driver’s License Number below I attest and ensure, under penalty of perjury, that I am the Real Estate Licensee registered with CyberCE to complete this course, also that this course was not completed in less time than the approved Continuing Education Credit hours and that I will personally complete the required Final Examination.” Certificate of Completion: Once the student has passed the final examination for any Cyberce course that student has enrolled in, Cyberce will provide an official Certificate of Completion for that course. The certificate will be provided online and will indicate the number of credit hours earned, and the course-approval category. The certificate will be placed into the student’s account where it can be printed out. Minimum System Requirements: A computer with internet connection and a web browser are required to register for and to complete this course. CalBRE Course and Instructor Evaluation An online evaluation of courses and instructors is available on the CalBRE Web site at http://www.bre.ca.gov/files/pdf/forms/re318a.pdf CalBRE Disclaimer statement: This Internet course is approved for continuing education credit by the California Bureau of Real Estate. However, this approval does not constitute an endorsement of the views or opinions, which are expressed, by the course sponsors, instructors, authors or lecturers. All web links are provided as educational tools only; the inclusion of links from these sites does not imply approval or endorsement by the California Bureau of Real Estate. The California Bureau of Real Estate does not make any endorsement, express or implied, of any links to or from its sites, nor is it responsible for content or activities of any linked sites and is not to be construed as an endorsement of the goods and/or services provided by these companies in any way whatsoever.

NOTICE CyberCE Policy regarding Continuing Education Courses PLEASE READ THE FOLLOWING INFORMATION BEFORE PROCEEDING WITH THIS COURSE. Online Course: Trust Funds This internet course is approved for continuing education credit by the California Bureau of Real Estate. However, this approval does not constitute an endorsement of the views or opinions, which are expressed, by the course sponsors, instructors, authors or lecturers. The title of this internet course is Trust Funds. This course is approved for 3 hours of continuing education credit by the California Bureau of Real Estate under the category of Trust Funds. This course must be completed within one year from the date of registration. That date starts ticking from the day the course is mailed to you. There are no prerequisites for admission to this course.

THE FINAL EXAMINATION Once you have completed all sections of this course along with each incremental assessment, the link to the Final Exam will be available to you. Prior to taking the final exam, you must enter your valid California Drivers License Number below the following statement: “By entering my valid California Driver’s License Number below I attest and ensure, under penalty of perjury, that I am the Real Estate Licensee registered with CyberCE to complete this course, also that this course was not completed in less time than the approved Continuing Education Credit hours and that I will personally complete the required Final Examination.” The final exam consists of 15 Multiple Choice questions and you will be allotted 15 minutes to complete the exam. When you complete the exam, click on the submit button and your test will automatically be graded. It will let you know with a pass/fail result. If you do not complete the exam within the 15 minute time period, your exam will automatically be submitted for grading and unanswered questions will be marked as incorrect. Please note that your exam cannot be saved and finished at a later time. The Exam must be taken during one continuous on-line session so you must remain connected to the Internet the entire time you are taking the exam. If you are kicked off line or your computer crashes your information is not saved. Be sure to allot yourself a time period sufficient to complete the final exam without interruption. CalBRE regulations do not allow the test to be printed out, copied, or downloaded You must score 70% or better to pass. If you fail you will be given an alternate test which must include no more than 10% repeat questions. This alternate test will also be 15 multiple choice questions which must be completed within 15 minutes. If you do not pass this second exam, you will have to re-enroll in the course. Upon successful completion of the course and final exam, a certificate of completion will be posted to your on-line account and available for you to print out.

Student Instructions Real Estate Continuing Education Online Course: Trust Funds This Internet course is approved for continuing education credit by the California Bureau of Real Estate (CalBRE). However, this approval does not constitute an endorsement of the views or opinions, which are expressed, by the course sponsors, instructors, authors or lecturers To get started, please go to www.cycberce.biz and click on "student login." Enter the username,and password that you established when you first registered for the course. From there you will have access to download the course material in a PDF format. Completing the course: The course will be provided to you on-line in Sections. After each section you will be required to complete an assessment of your knowledge for that section. After each question, you will receive immediate feedback on whether you are right or wrong and be given the page number where the pertinent information can be found. If you answer is incorrect, you will be prompted to answer the question once again. A minimum time period must be allotted to each section and you will not be able to go to the next section before that minimum time has elapsed. Internet Testing Once you have completed all sections along with each incremental assessment, the link to the Final Exam will be available to you. Prior to taking the final exam, you must enter your valid California Drivers License Number below the following statement: “By entering my valid California Driver’s License Number below I attest and ensure, under penalty of perjury, that I am the Real Estate Licensee registered with CyberCE to complete this course, also that this course was not completed in less time than the approved Continuing Education Credit hours and that I will personally complete the required Final Examination.” The final exam consists of 40 Multiple Choice questions and you will be allotted 40 minutes to complete the exam. When you complete the exam, click on the submit button and your test will automatically be graded. It will let you know with a pass/fail result. If you do not complete the exam within the 40 minute time period, your exam will automatically be submitted for grading and unanswered questions will be marked as incorrect. Please note that your exam cannot be saved and finished at a later time. The Exam must be taken during one continuous on-line session so you must remain connected to the Internet the entire time you are taking the exam. If you are kicked off line or your computer crashes your information is not saved. Be sure to allot yourself a time period sufficient to complete the final exam without interruption. CalBRE regulations do not allow the test to be printed out, copied, or downloaded You must score 70% or better to pass. If you fail you will be given an alternate test which must include no more than 10% repeat questions. This alternate test will also be 40 multiple choice questions which must be completed within 40 minutes. If you do not pass this second exam, you will have to re-enroll in the course. Upon successful completion of the course and final exam, a certificate of completion will be posted to your online account and available for you to print out. If you have enrolled in more than one CE course with CyberCE, please note the following CalBRE Regulation: 3007.3 (c) "Participants taking a correspondence offering or package of offerings shall be limited to completion

Student Instructions Page Two If you have enrolled in more than one CE course with CyberCE, please note the following CalBRE Regulation: 3007.3 (c) "Participants taking a correspondence offering or package of offerings shall be limited to completion of final examinations for a maximum of fifteen (15) credit hours during any one 24 hour period. A participant shall not be granted access to additional segments of the final examination for offerings or a package of offerings that exceed fifteen (15) credit hours until the appropriate 24-hour period has lapsed." Renewing your License Once you have completed all of your required Continuing Education you can complete your renewal application with CalBRE; Form RE 209 for Sales License or RE 208 for Brokers. These forms are available on the CalBRE web site, www.bre.ca.gov . Do not send your Certificates of Completion to CalBRE, instead you must complete the CalBRE Course Verification Form, RE 251 which is also available on their web site. CalBRE Elicensing offers the opportunity to renew your license electronically on the CalBRE web site. Contacting CyberCE: If you have any questions or concerns about this Continuing Education Course, contact CyberCE at: [email protected] .

TABLE OF CONTENTS I.

What Constitutes Trust Funds ……………………………..........….....

1

II.

Which Are Trust Funds ……………..………………………….……..

2

III.

Necessity for Trust Accounts ………………………...………….……….

3

IV.

Trust Fund Handling Requirements …………..………….……..........…

5

V.

Identifying the Owners of Trust Funds ………………………………….

6

VI.

Property Management Trust Funds ………………………….…...……

8

VII.

Trust Fund Bank Accounts ………………………..…….……………

9

VIII.

Commingling Prohibited ………………….……………………………...

11

IX.

Conversion of Trust Funds ....….……………………………….…..…….

13

X.

Trust Fund Liability …………….………………….……………………

14

XI.

Accounting Records ………………………….……………………….…..

16

XII.

Recording Process …….......…………………………………..………….

22

XIII.

Reconciliation of Accounting Records…………..…..……...……………

22

XIV.

Documentation Requirements ………………………………………….

24

XV.

Audits and Examinations …………………………………..…......……… 25

XVI.

Sample Transaction Account Records ……...….………………......……

26

XVII.

Summary ……………………………..………………………..……..……

29

XVIII

Appendix ……………………………………………….……………….

30

XIX

References……………………………………………….……………….

31