Sellers of residential property generally must provide a written disclosure of the property's condition.
Before you read
Test yourself first: 5 questions
Question 1 of 5
A Minnesota salesperson commingles a buyer's earnest money with the brokerage's operating funds instead of depositing it in the broker's trust account. This conduct is best described as:
Answer: B. Commingling client funds with the brokerage's business or personal funds is prohibited conduct under Minnesota license law. Earnest money and other client trust funds must be held in a separate trust (escrow) account, not mixed with operating funds. Commingling is grounds for discipline regardless of later repayment or informal consent.
Question 2 of 5
In Minnesota, earnest money and other client trust funds held by a brokerage must be:
Answer: B. Minnesota law requires brokers to deposit trust funds such as earnest money into a separate trust (escrow) account and prohibits commingling client funds with the broker's own operating or personal funds.
Question 3 of 5
In Minnesota, earnest money and other client funds received by a brokerage must be:
Answer: C. Minnesota requires brokers to place earnest money and other client funds into a designated trust (escrow) account, kept separate from the broker's own operating funds. Commingling client funds with the broker's money is prohibited.
Question 4 of 5
Which of the following acts by a Minnesota licensee would most likely be grounds for the Department of Commerce to discipline, suspend, or revoke a license?
Answer: B. Commingling client trust funds with the broker's own funds is a serious violation of Minnesota license law and a common basis for disciplinary action; the other choices describe required or lawful conduct.
Question 5 of 5
In Minnesota, a real estate salesperson may lawfully conduct licensed brokerage activity only when:
Answer: B. A Minnesota salesperson must work under and be supervised by a licensed real estate broker. A salesperson cannot operate independently or hold client trust funds in their own name.
Keep the streak going with more questions like these, each with a full rationale.
Must-know rules
- Pre-license education: 90 hours = three 30-hour courses (Course I, II, III).
- Minnesota is NOT a community property state; it is an equitable distribution / common-law property state.
- Sellers of residential property generally must provide a written disclosure of the property's condition.
- Material facts known to the licensee that affect the property must be disclosed to the parties.
- Client and earnest money / trust funds must be held in the broker's trust (escrow) account, not commingled.
- Commingling client trust funds with the broker's own operating money is prohibited.
- Salespeople work under and are supervised by a licensed broker who is responsible for trust-account handling.
- Confirm current disclosure forms, exemptions, and trust-account rules with the Minnesota Department of Commerce.
Minnesota Disclosures, Escrow/Trust Funds & Key Numbers: FAQs
Is Minnesota Disclosures, Escrow/Trust Funds & Key Numbers on the real estate exam?
Yes. State License Law is a scored domain on the Minnesota real estate licensing exam, and this topic appears in the state license-law portion.
Is this cheat sheet free?
Yes — every page on Cinna RE's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.
Does Minnesota test this differently?
Minnesota applies its own license law on top of the national portion. This page covers the Minnesota rules specifically, which is what the state section of your exam tests.
