Are brokers required to have a trust account?
Not required, but they are also never given custodial care of money belonging to another person. The broker’s Duty to Account is still required.
The Oklahoma Real Estate License Code requires brokers and property managers to maintain a bookkeeping system which clearly and accurately discloses full compliance with the law. What must it include (8 items)
- Name(s) of buyer(s) and seller(s)
- The amount and nature of the deposit
- The date of the deposit
- The address of the subject property
- The date the funds were disbursed
- The amount of the disbursement
- The number of the check of disbursement
- A current running balance of all funds held in the trust account.
How long must a broker maintain documents following a transaction?
5 years
Name four examples of improper handling of trust funds:
- failure to deposit the funds by the end of the third banking day after acceptance of an offer
- releasing of funds without proper authority
- use of funds for payment of unauthorized expenses
- failure to establish an accurate accounting system.
What are the three steps a broker should do if earnest money or security deposits are disputed?
- Attempt to obtain a written agreement from buyer and seller consenting to the release of the funds.
- Hold the funds in his/her trust account until one or both parties file suit. In this case, the broker will normally be named as a defendant. When the case is adjudicated, the broker may then use the court’s judgment as authority to release the funds.
- In the absence of a civil suit and after at least 30 days have passed since the closing date indicated on the contract form, the broker may decide ownership of the funds. Once the broker has decided how to disburse the funds, written notice must be provided to buyer and seller indicating the broker’s decision and outlining how the funds are to be disbursed. This notice should be sent by certified mail with return receipt to the last known addresses of the buyer and seller. The notice will inform the parties that disbursement will occur 15 days after the date shown on the return receipt of the certified mail. If there is no objection from either party, the broker may disburse the funds as indicated in the letter of notice.
What is an Interpleader?
An interpleader action may be filed by a broker without deciding how the funds should be disbursed, or if the broker claims an interest in the funds.
The broker may pay the funds directly into the court clerk’s office and the court then decides which party, buyer or seller, is entitled to the money.
When can trust funds be withdrawn from a trust account?
- transaction is consummated
2. transaction is terminated
How can an offer be terminated by operation of law?
- Death or insanity of the buyer or seller before acceptance.
- Destruction of the property
- Chan of law making the offer illegal
What type of bookkeeping system does the Oklahoma Real Estate License Code require brokers and property managers to maintain?
Any system which can identify trust funds by individual depositor.
When filing An Interpleader Action the law requires the defendants be notified as least how manyh days prior to the hearing?
7 days
