Deposits and trust accounts: Accounting; commingling; records; inspection and audit.
1. All deposits accepted by every real estate broker or person registered as an owner-developer pursuant to this chapter, which are retained by him pending consummation or termination of the transaction involved, must be accounted for in the full amount at the time of the consummation or termination.
2. Every real estate salesman or broker-salesman who receives any money on behalf of a broker or owner-developer shall pay over the money promptly to the real estate broker or owner-developer.
3. A real estate broker shall not commingle the money or other property of his client with his own.
4. If a real estate broker receives money, as a broker, which belongs to others, he shall promptly deposit the money in a separate checking account located in a bank or credit union in this state which must be designated a trust account. All down payments, earnest money deposits, rents, or other money which he receives, on behalf of his client or any other person, must be deposited in the account unless all persons who have any interest in the money have agreed otherwise in writing. A real estate broker may pay to any seller or the seller’s authorized agent the whole or any portion of such special deposit. The real estate broker is personally responsible and liable for such deposit at all times. A real estate broker shall not permit any advance payment of money belonging to others to be deposited in the real estate broker’s business or personal account or to be commingled with any money he may have on deposit.
5. Every real estate broker required to maintain a separate trust account shall keep records of all money deposited therein. The records must clearly indicate the date and from whom he received money, the date deposited, the dates of withdrawals, and other pertinent information concerning the transaction, and must show clearly for whose account the money is deposited and to whom the money belongs. The real estate broker shall balance each separate trust account at least monthly. The real estate broker shall provide to the Division, on a form provided by the Division, an annual accounting which shows an annual reconciliation of each separate trust account. All such records and money are subject to inspection and audit by the Division and its authorized representatives. All such separate trust accounts must designate the real estate broker as trustee and provide for withdrawal of money without previous notice.
6. Each real estate broker shall notify the Division of the names of the banks and credit unions in which he maintains trust accounts and specify the names of the accounts on forms provided by the Division.
7. If a real estate broker who has money in a trust account dies or becomes mentally disabled, the Division, upon application to the district court, may have a trustee appointed to administer and distribute the money in the account with the approval of the court. The trustee may serve without posting a bond.
Last modified: February 27, 2006