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Complete glossary lessonGeorgia-specific rule

Trust funds

Trust funds are money or property a Georgia broker receives on behalf of another person in a real estate matter, including earnest money, rents, security deposits, and other client or customer funds when held by the broker.

Official area

State Laws and Rules

Knowledge cluster

Georgia trust funds

Learning sequence

Define, distinguish, apply, retrieve

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Exam purpose

Recognize the rule, then reject the nearest look-alike.

Georgia lens

Apply the state distinction only when the facts call for it.

Connected terms

Connected to 4 terms and one official content area.

What does Trust funds mean in real estate?

Trust funds are money or property a Georgia broker receives on behalf of another person in a real estate matter, including earnest money, rents, security deposits, and other client or customer funds when held by the broker.

How is Trust funds different from the closest exam answer?

Trust funds describe whose money it is. A trust account is the separate account used to hold qualifying trust funds.

What is the Georgia-specific rule?

Georgia law requires covered funds to be accounted for, safeguarded, deposited, recorded, reconciled, and disbursed according to the agreement and Commission rules.

Worked exam example

Scenario

A property manager collects tenant rent and deposits it into the proper trust account before making authorized owner disbursements.

Decision rule

Trust funds describe whose money it is. A trust account is the separate account used to hold qualifying trust funds.

What is the most common exam trap?

Trap correction

Compensation expected by the broker does not become brokerage money until it is earned and properly disbursed.

Memory cue: Compensation expected by the broker does not become brokerage money until it is earned and properly disbursed.

Original exam check

Apply the definition

Which statement correctly explains Trust funds?

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Related terms to learn next

Trust account

A trust account is a separate, federally insured account in which a Georgia broker holds money belonging to others in connection with real estate activity, including earnest money when the broker receives it.

Earnest money

Earnest money is a deposit a buyer provides under a purchase agreement to show seriousness and support the transaction.

Commingling

Commingling is the improper mixing of money belonging to clients, customers, tenants, owners, or other persons with a broker's personal or operating funds.

Conversion

Conversion is the unauthorized taking, use, transfer, or exercise of control over money or property belonging to another person, including trust funds held in a real estate transaction.

Recommended next complete lesson

Continue with State Laws and Rules complete lesson. It places this term inside the full rule, worked examples, exam traps, and mixed practice required for mastery.
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Trust funds quick answers

Facts checked against the current PSI Candidate Information Bulletin and GREC sources. Editorial standards.

What is Trust funds?

Trust funds are money or property a Georgia broker receives on behalf of another person in a real estate matter, including earnest money, rents, security deposits, and other client or customer funds when held by the broker.

What is Trust funds commonly confused with?

Trust funds describe whose money it is. A trust account is the separate account used to hold qualifying trust funds.

How does Georgia treat Trust funds?

Georgia law requires covered funds to be accounted for, safeguarded, deposited, recorded, reconciled, and disbursed according to the agreement and Commission rules.