Depositing Broker’s Own Funds into Trust Account

QUESTION:   My firm maintains a trust account for funds that we receive in a fiduciary capacity. Our bank charges a monthly fee for that trust account. Are we allowed to deposit our own funds into the trust account to cover the bank’s service charges?

ANSWER:  Yes. However, the amount you are allowed to deposit is strictly limited

North Carolina’s Real Estate License Law sets forth the general rule: a licensee is prohibited from commingling the money of the licensee’s principals with his or her own funds. However, the North Carolina Real Estate Commission has recognized a limited exception to this rule to cover the issue of bank service charges.

The Commission’s position is reflected in Rule 58A.0117(c)(4)(C), which provides that “a broker may maintain a maximum of $100.00 of company funds in a trust account for the purpose of paying service charges incurred by the account.” The Rule goes on to provide that “[i]n the event that the services charges exceed one hundred dollars ($100.00) monthly, the broker may deposit an amount each month sufficient to cover the service charges.” Note that the Rule does not permit a broker to deposit the funds necessary to avoid the bank’s service charges (such as a $1,000.00 minimum balance).

A broker who deposits company funds in a trust account to cover bank charges must be careful to properly enter and identify such funds on the deposit ticket and on a separate ledger sheet in his or her trust account records. Thereafter, the broker must record any bank charges as they occur in the broker’s trust account journal or check stub running balance and post the bank charges on the separate funds ledger sheet.

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