When must a real estate firm maintain trust accounts?

A real estate firm must maintain trust accounts specifically when holding trust funds. Trust funds refer to any money that the firm receives on behalf of clients, which can include earnest money deposits, rents, and other client-related financial transactions. The primary purpose of maintaining these accounts is to ensure that client funds are kept separate from the firm's operating funds, thereby protecting the clients' interests and providing a clear audit trail.

Trust accounts are regulated to prevent mismanagement or unauthorized use of client funds, making it essential for firms to have these accounts whenever they handle any form of trust money. This requirement is established to uphold transparency and accountability in real estate transactions.

Other options, such as the suggestion that trust accounts are only needed during the closing process or at specific events like open houses, do not accurately reflect the ongoing responsibility a firm has in managing client funds. Trust accounts should be maintained continuously whenever trust money is involved, ensuring compliance with legal and ethical standards in real estate practice.