Hey Brokers, I have a question.

If I am doing an EMD release, can I transfer that money from our Escrow account, to our Operating account and cut the refund check to the client from that account? Or does the refund check, have to come out of our Escrow Account.

Does anyone know? We don't have checks for our escrow account and I just want to make sure it's not considered commingling. I really don't want checks coming out of our escrow account. It makes it more difficult to balance. You have people waiting weeks to cash checks, etc. The operating account we have to balance daily as it's what we pay commissions, expenses, etc. out of.

Thanks guys!

I think it's time to get checks for your Escrow Account, whether you want to or not.

Customer Funds show never be sloshing back and forth between "your" other Accounts and the Escrow Account. The Escrow Account is the money of others, that they've temporarily entrusted to your care; but they should always be separated.

When your State's Auditors come to take a look at how you manage the Escrow Account, they'll be expecting to clearly see specific checks drawn for Refund or Payment on behalf of a Customer/Client at a Closing . . . . NEVER some inter-account Transfer !

But that's the way it is here in Vermont; Michigan might not care . . . . I don't know.

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 an Attorney in the relevant jurisdiction to ensure accuracy before acting on this information.

Real Estate Banking Accounts

Locally real estate brokerage firm will no longer accept cash, for a variety of reasons one of which is that there must be a clear paper trail regarding funds held in-trust.

Regulatory authorities have complete legislative control over the “The Real Estate Trust Account” of brokerage firms, similar to an escrow account, within any banking or other institution and the regulatory investigators have full access and control over such accounts.

The brokerage firm must be able to produce to regulatory investigators on demand, copies of cancelled cheques, cheque stubs and deposits slips or books and everything must conform with any relevant real estate transaction and the established time frame required by regulation.

Further, funds cannot be intermingled between the every day General Account and the Real Estate Trust Account, and all brokerage firms are subject to regulatory periodic audits.

Additional accounts cannot be opened without the express permission of the regulatory authorities, as may be required where brokerage firms also manage properties and collect rents to be deposited in a separate account.

Last but not least, is the compliance with Federal law, specifically the “Financial Transactions and Reports Analysis Centre of Canada” referred to as “FINTRAC” their primary purpose is to combat money laundering and terrorist financing and they have a series of forms that are mandatory and must be submitted to them in relation to cash transactions or face up to 5 years in prison and all of which is enforced by the RCMP, our federal police force.

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 .

Same in Illinois...in and out of escrow account only...no transferring to main business account.

Rich Ayers
Broker/Owner

Co-mingling of funds is a huge no-no here in CA. Transferring funds from your trust account to your operating account is co-mingling by definition. I'd draw a cashier's check to make the refund if I didn't have standard checks.

Or have that Bank create some Temporary Checks (un-numbered) to cover you for a short period of time; just like when you first open an Account. That's usually a free service (at least around here).

You could face a fine or worse if you did that in Virginia - a cashier's check from the account majes the most sense unless you want to order some checks.

I think you could get a fine for that in Florida too.