New York — Business Practices & Escrow (19 NYCRR 175) — New York Real Estate — State Law Practice Test

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.

1. 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)

2. 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)

3. 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)