Mineral, Oil, and Gas Rights Mandatory Disclosure Statement is also required for most residential sales.
Before you read
Test yourself first: 5 questions
Question 1 of 5
Which of the following actions by a North Carolina broker would most clearly constitute a license-law violation subject to disciplinary action by the Commission?
Answer: A. Commingling client funds with a broker's own money is prohibited. Earnest money and other trust funds must be deposited into a designated trust or escrow account, not the broker's personal or operating account. The other choices describe proper, required, or recommended practice.
Question 2 of 5
In North Carolina, who is required to designate a broker-in-charge?
Answer: B. Each real estate office or firm where brokerage is conducted must have a designated broker-in-charge responsible for supervising affiliated brokers and overseeing trust accounts, advertising, and compliance.
Question 3 of 5
Which practice by a North Carolina broker constitutes prohibited commingling?
Answer: B. Commingling is mixing client or third-party trust funds with the broker's personal or business funds. NC requires trust money to be held separate from the broker's own money. Separate accounts, per-property ledgers, and monthly reconciliations are all required, proper practices.
Question 4 of 5
Which records is a North Carolina broker required to maintain for trust money received and disbursed?
Answer: B. NC requires both a journal (chronological record of all trust receipts and disbursements) and individual ledgers for each property or beneficial owner showing the running balance. These, with bank records and reconciliations, form the required trust-account recordkeeping.
Question 5 of 5
How must a North Carolina broker handle earnest money and other client funds received in a transaction?
Answer: A. License Law requires client funds such as earnest money to be deposited into a trust or escrow account and kept separate from the broker's own funds; commingling is prohibited.
Keep the streak going with more questions like these, each with a full rationale.
Must-know rules
- Residential Property and Owners' Association Disclosure Statement must be furnished to a buyer of most 1-4 unit residential resales no later than before an offer is made.
- The owner may answer Yes, No, or No Representation to disclosure items; failing to deliver the statement timely gives the buyer a limited right to cancel.
- Mineral, Oil, and Gas Rights Mandatory Disclosure Statement is also required for most residential sales.
- Lead-based paint disclosure applies to homes built before 1978 (federal requirement).
- Trust/escrow money must be deposited into a trust or escrow account no later than three banking days after the broker receives it (after acceptance for most contracts).
- Brokers must not commingle client trust funds with personal or firm operating funds and must maintain accurate trust account records.
- Records, including trust account documentation, must be retained for three years per Commission rules.
North Carolina Required Disclosures & Escrow/Trust Timeframes Quick Sheet: FAQs
Is North Carolina Required Disclosures & Escrow/Trust Timeframes Quick Sheet on the real estate exam?
Yes. State License Law is a scored domain on the North Carolina 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 North Carolina test this differently?
North Carolina applies its own license law on top of the national portion. This page covers the North Carolina rules specifically, which is what the state section of your exam tests.
