Trust Accounting 101 for Real Estate Agents

Trust money is sacrosanct. It is not your money; it belongs to the vendor or landlord. Mismanaging it is the fastest way to lose your licence and face criminal charges.

The Golden Rules

1. Never Overdraw: You cannot pay a landlord more than you hold in their specific ledger. If you do, you are using another person's money to pay them. This is a major breach.
2. Daily Reconciliation: Unlike a general business account, a Trust Account should be reconciled daily. If there is a discrepancy, you need to find it immediately.
3. End of Month (EOM): You must close the month and generate statutory reports within the designated days (usually 14-21 days depending on your state). These reports must be signed and stored.

External Examinations

Every year, you must have your Trust Account audited by a qualified External Examiner. We handle this process for agencies, ensuring your files are perfect before the auditor arrives.