A.Unless otherwise provided in writing by all parties to a transaction, any licensed real estate broker who does not immediately place all monies entrusted to the broker, in the broker's capacity as a real estate broker, in a neutral escrow depository in this state shall on receipt place all such monies in a trust fund account in a federally insured or guaranteed account in a depository located in this state. The commissioner may adopt such rules as are necessary to provide for records to be maintained and the manner in which such trust fund account deposits may be made.
B.The following minimum requirements apply to each broker's trust fund account:
1.The broker shall make deposits to trust fund accounts by deposit slips. Receipts or other documentation shall identify each transacti
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A. Unless otherwise provided in writing by all parties to a transaction, any licensed real estate broker who does not immediately place all monies entrusted to the broker, in the broker's capacity as a real estate broker, in a neutral escrow depository in this state shall on receipt place all such monies in a trust fund account in a federally insured or guaranteed account in a depository located in this state. The commissioner may adopt such rules as are necessary to provide for records to be maintained and the manner in which such trust fund account deposits may be made.
B. The following minimum requirements apply to each broker's trust fund account:
1. The broker shall make deposits to trust fund accounts by deposit slips. Receipts or other documentation shall identify each transaction, the date and the amount of each deposit and the names of parties involved in the transaction represented by the deposit, and monies shall be used only for the purpose for which the monies were deposited.
2. The broker shall retain a complete record of all monies received in connection with a real estate transaction electronically or in the main or branch office of the designated broker in this state or at an off-site storage location in this state if the broker provides prior written notification of the street address of the off-site storage location to the department. A broker's records shall be kept according to generally accepted accounting principles and shall include properly descriptive receipts and a disbursement journal and client ledger. The broker shall keep any computerized records in a manner allowing reconstruction in the event of destruction of electronic data.
3. On a monthly basis the broker must complete a three-way reconciliation between the trust fund account bank statements, client ledgers and trust fund account ledgers and provide an explanation for any variation.
C. A variation that is caused by any of the following acts or omissions is a violation of this chapter:
1. Failing to remove any interest that is earned on a trust fund account at least once every twelve months.
2. Allowing advance payment of monies belonging to others to be deposited in the broker's personal account or to be commingled with personal monies. For the purposes of this paragraph, it is not commingling if a broker deposits personal monies of not more than $5,000 to keep the account open or to avoid charges for an insufficient minimum balance.
3. Failing to identify monies as nonowner tenant monies in descriptive receipts.
4. Failing to maintain separate ledgers for each property.
5. Failing to regularly complete a three-way reconciliation as required by subsection B, paragraph 3 of this section.
6. Transferring monies between accounts that are owned by different persons unless each person consents in writing.
7. Failing to create checks and balances.
8. Failing to follow state or federal requirements.
D. An agreement to place monies entrusted to the broker in a depository that is located outside of this state is valid if all parties to the transaction agree in writing and either:
1. The monies are placed in a property management trust account established pursuant to section 32-2174 and:
(a) The account is federally insured or guaranteed.
(b) The property management agreement contains:
(i) Disclosure that the department's regulatory protections of the owner's monies may be significantly hampered.
(ii) Disclosure that the owner may not have access to or any control over the trust account, except to audit and review the status of the account.
(iii) An addendum that has the signed authorization by an appropriately empowered official of the depository in which the trust account is placed that the trust account and all related documentation will be open to examination by the department and the owner.
2. If the monies are not deposited in a property management trust account, the broker discloses to the parties to the transaction that potential risks may accrue as the result of depositing the monies in a depository outside this state.
E. This section does not allow a broker to commingle monies entrusted to the broker with the broker's own monies, unless the commissioner adopts rules that allow commingling.