ADRE Model Broker Policy Manual-Trust Accounts

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Trust Accounts

This section should cover:

  • Whether the Company has a trust account.
  • If the company has a trust account, what procedures should Sales Associates follow to submit checks to trust account.
  • Note: Because of the sensitivity of the handling of trust funds, it is recommended that the broker understand the information on the ADRE website –

Trust Account Records

Trust account records should show at all times

  1. When money came into the trust account
  2. How much
  3. Who it belongs to
  4. When it was disbursed and to whom.

Take a look at the Trust Account Sample.  The examples outline proper maintaining of a trust account record keeping system, at it’s simplest.  The money went into and came out of the trust account on different dates.  These events were recorded in two different places (first the checkbook, then the client ledger) and were added and subtracted, as appropriate.

The total of all the sub-accounts (client ledgers) equals the Receipts and Disbursements Journal (Checkbook) balance.  This is true at any step in the process.  You can see from the example (again the Trust Account Sample) that $490 belongs to the broker in personal funds, $500 is Black’s deposit, and $500 belongs to Ferrar for his earnest money.  Everyone else’s money has been disbursed, and their balances are now zero.

If you are doing the posting correctly, you will have a constant verification which you can use as a “spot check” from time to time to confirm your accuracy.  Remember:

The checkbook balance should always equal the total of the client ledger balances which can be reconciled with the bank statement (at a minimum, monthly).

If you have been recording the deposits and checks in the trust account checkbook as they occur, with no errors, the current checkbook balance will agree with the total of the client ledger balances.  The more frequently you double check a manual system, the quicker you will be able to correct any mistakes, and the easier they will be to find.  This applies to computer systems, as well.  A system that will allow you to do an “interim” bank reconciliation report without “closing out” the month can be valuable in double checking entries during the month.

Quick Quiz

Fill in the Blank:
The more you double check a manual system, the quicker you will be able to correct any mistakes, and the easier they will be to find. .

Once you “close” a sales client ledger, there is no longer any need to keep the page or ledger card with your active ledgers.  That page can be removed and filed in the transaction folder to give a ready reference to your “audit trail” of that transaction at any time.

Property Management ledgers, since they carry ongoing balances, are easier to cross check with the checkbook if they are kept together, rather than in the client files.

Computer Systems

Please note that if you buy a computer system to perform your calculations for you, yourdownload-2bank reconciliation report should resemble the sample shown.  Many computer “bank reconciliation” procedures are strictly preliminary and verify that you input the cleared items correctly into the system.  They do not give you the uncleared or outstanding items or reconcile with the client ledger balances.

Usually another report, which may have the wording “cash balances” in the title will give you the required information; i.e., tell you which checks and deposits are still uncleared, or outstanding, and many times, in one step, will give you a summary of ledger totals and tell you whether they are in balance.

If you stop with the computer program titled “bank reconciliation” process, you still have not completed the bank reconciliation report until you have reviewed the summary report which will give you the information as to whether your check book balance agrees with your client ledger balances, and which items are necessary to consider in balancing with the bank records.
Trust Account Requirements


PERMISSIBLE SIGNERS: broker or licensees under the broker


DEPOSIT METHOD: Within 24 hours and deposit slips must be descriptive.

RECORDS STORAGE: 5 years &  after closing date of transaction.


PERMISSIBLE SIGNERS: Broker or licensees or unlicensed employees of the broker.


DEPOSIT METHOD: Up to 3 days & deposit slips and receipts or other descriptive method.

RECORDS STORAGE: 3 years & after the date of execution of each document.

Under A.R.S. § 32-2151 (B), the following minimum requirements apply to each broker’s trust fund account:

32-2151. Disposition of funds; trust money deposit requirements

A. Unless otherwise provided in writing by all parties to a transaction, any licensed real estate broker who does not immediately place all funds entrusted to the broker, in the broker’s capacity as a real estate broker, in a neutral escrow depository in this state shall upon receipt place all such funds 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:

  • 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.
  • The broker shall retain a complete record of all monies received in connection with a real estate transaction 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 a properly descriptive receipts and disbursement journal and client ledger.
  • The broker shall keep any digital records in a manner allowing reconstruction in the event of destruction of electronic data. The broker shall maintain a trust fund account bank reconciliation and client ledger balance on a monthly basis and shall remove any interest earned on a trust fund account at least once every twelve months.
  • A broker shall not permit the advance payment of monies belonging to others to be deposited in the broker’s personal account or to be commingled with personal monies. It is not considered commingling if, when establishing a trust fund account, a broker deposits monies not exceeding three thousand dollars (eff. download-101/01/2013) to keep the account open or to avoid charges for an insufficient minimum balance.

Weapons Law

This section should include:

  • The broker may want to include a weapons policy. Notably, Arizona law permits private business owners to prohibit weapons from being brought onto their property, whether signs are posted or not. Failure to obey the request can result in a charge of trespassing.
Quick Quiz

Fill in the Blank:
Arizona law private business owners to prohibit weapons from being brought onto their property, whether are posted or not. .


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