Tech Corner: Do You Know Your Trust Account Software?

Do you have a trust account? Have you taken the Basic Trust Account Procedures Course?

The Commission does not require brokerages to have a trust account. However, if a broker will be receiving money while acting in their fiduciary capacity, they must deposit the monies in a trust or escrow account as defined by Rule 58A .0117(b). Additionally, they must deposit the money no later than 3 banking days following receipt unless another time frame is stated under Rule 58A .0016(b).

The Basic Trust Account Procedures Course is required when a BIC assumes responsibility for a trust account (i.e. opens a new account or takes over an existing account). Further, this course must be taken within 120 days of assuming responsibility per Rule 58A .0110(g)(9). During the course, brokers will learn the law and rules regarding trust accounts so they will be able to maintain them in adherence with the License Law and Commission rules. BICs are not required to take the course more than once in a three year period.

Trust Account Tutorials are also available on the Commission’s website to assist brokers with learning the process of maintaining trust account records that comply with Real Estate Commission rules. The tutorials cover Deposits, Disbursements, and Monthly Account Reconciliations using ledgers and trust account journals.

The Commission does not dictate the software that a brokerage must use while maintaining their trust account. However, brokers should possess in-depth knowledge of the trust account software system they choose to use. It would be in the best interest of brokers to receive training and/or hire an expert to ensure they can utilize the full capabilities of the system. Additionally, BICs should be sure to keep the software systems they use up-to-date.

To assist brokers with evaluating the capabilities of their system, the Commission has provided “Broker Software Evaluation Forms” for Sales, Long Term Rentals, and Vacation Rentals on its website. The evaluation forms ask a variety of questions such as:

• Does the software generate a trust/escrow journal?
• Does the software generate supplemental disbursement worksheets that identify each disbursement transaction?
• Does the software generate supplemental deposit worksheets for each bank deposit?

These forms may assist with determining if the software provides the broker with the necessary information and documentation for compliance with the License Law and Commission rules.

NOTE: The Commission encourages brokers to consider whether they can utilize the trust account software independently and comply with the License Law and Commission rules or if they need to employ an expert to assist them.

If you have any further questions and/or comments regarding trust accounts, please email Regulatory Affairs at regulatoryaffairs@ncrec.gov.