Im planning on oppening up a PM business in Florida. I have been learning up on the subject. I know I need a trust account for the rent I collect but HOw and where do I open one?

LOCALLY: A brief synopsis of what may be required is knowledge of the current pertinent laws and the required process to be followed in relation to registering a business, establishing business banking accounts, the licencing and insurance coverage as may be required.

1. A due diligence search of local by-law to learn whether or not you will be permitted to operate a business from your chosen business address;

2. A due diligence search to learn if a busines licence and/or other licencing is required and whether insurance and bonding is required.

3. A nuan search (name search) to ensure that your business name will not conflict with a business, already registered under your contemplated business name.

4. Determine the type of registration you wish to register your business as, i.e. Sole Propietorship, or Partnership, or a incorporated business.

5. With the official results of your name search visit the appropriate registrations office and completed the required forms for registration, pay the fees and await delivery of your official documentation as evidence that your business is officially registered.

6. Take your official documents together with certified copies thereof, and visit you banking institution of choice and open two banking accounts a) a general banking account and b) a trust account and arrange to have cheques printed with respect to each account.

7. Set-up your bookeeping system with regards to each account.

8. Note that setting up a corporation with or without share capitol is much more involved.

9. There are also tax consequences upon which a accountant and/or an attorney can advise you.


Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information .

You can open up a trust account at almost any bank. The important part about that is adhering to your states guidelines.

In Oregon, you have to:
1. Notify the bank that it is a trust acct for Prop Mgt purposes.
2. Have separate trust accounts for rental input and security deposits (standard everywhere I am sure)
3. Some states require a separate trust account for each property...you will want to double check that for your state
4. Notify the state Real Estate Association about the banking account number and information
5. Perform monthly reconciliation of the trust account with your ledger and accounting system

Patrick
http://www.Rents2Riches.com

There's even more to it than Rents2Riches points out. You really need to get in touch with your local board of Realtors and ensure you are complying with state law.

In my state, we can have one account for security deposits and a second for rental collections, disbursements to property owners, etc., then I have a third account for my company's operating expenses. Any trust account must be in the Broker's name and include it's purpose. Yes, even the way an account is named can get you in trouble.

Talk to your board and understand the rules rather than relying on information from us that may not apply to your area/situation.

Opening the account will not be the challenge. The monthly Trust Account Reconciliations will be your challenge. If you don't account for the money correctly the State may take your license. One way to make this easier is to get property management specific software. Some of the best options are Property Boss, PropertyWare, AppFolio, or Buildium. There are many others but these are the ones I think are the best available for 1 - 4 family property management. With property management specific software you have safeguards built in to prevent you from writing checks for an owner whose account doesn't have enough money to pay the check even though your total account balance can cover the check. If you use an application like QuickBooks or Quicken, and tell it to write checks, it will - no questions asked.

If you are an agent and don't know what you are doing, I recommend you get with someone that can teach you how to manage property before you start, make mistakes, and lose your license.