In Chapter 5 of the Colorado Real Estate Broker Rules and Regulations we learn first that any brokerage firm or broker who receives money belonging to others must establish written accounting control policies and procedures which must include adequate checks and balances over the financial activities of the broker, brokerage firm, and unlicensed persons as well as manage the risk of fraud or illegal acts. Immediately following this definition is Rule 5.2 covering trust or escrow accounts which says all money belonging to others accepted by a broker or brokerage firm for deposit into the broker's or brokerage firm's trust or escrow account must be deposited in one or more accounts separate from other money belonging to the broker or brokerage firm. The broker or brokerage firm must identify the fiduciary nature of each separate trust or escrow account in deposit agreements with a recognized depository by the use of the word trust or escrow and a label identifying the purpose of such account such as sales escrow, rental escrow, security deposit escrow, or other abbreviated form defined in the deposit agreement. The broker or brokerage firm must retain a copy of each executed trust or escrow account deposit agreement for inspection by the commission. But what does all this mean and how must real estate brokers comply with these and the rules that follow? In this trust accounts and record keeping course we will discuss not only the rules in detail but also the procedures that must be followed in order to remain compliant. At the conclusion of this course the student will be able to summarize who is required to maintain a trust account, list the various types of trust accounts and the appropriate use of each, and finally students will be able to explain the record-keeping requirements for Colorado real estate brokers.

Colorado Real Estate Broker Rules and Regulations

trust accounts

record-keeping

accounting control policies

separate trust or escrow accounts