Key Takeaways
- Principal brokers must maintain at least one real estate trust account in a Utah bank or credit union
- Trust accounts must be separate from operating accounts
- A principal broker may not deposit more than \$500 of their own funds into the trust account
- Trust accounts must be reconciled with bank records at least monthly
- Property management companies must maintain separate trust accounts from real estate trust accounts
Utah Trust Account Requirements
Utah principal brokers must maintain trust accounts to hold client funds separate from their operating funds. These requirements are governed by Utah Administrative Code R162-2f-403.
Trust Account Basics
What is a Trust Account?
A trust account (also called an escrow account) is a bank account where brokers hold funds belonging to others:
| Fund Type | Examples |
|---|---|
| Earnest money deposits | Buyer's good faith deposit |
| Security deposits | Tenant deposits on rentals |
| Rent collections | Collected on behalf of landlords |
| Other client funds | Closing proceeds pending disbursement |
Where to Open
Trust accounts must be maintained at:
- A bank located within Utah
- A credit union located within Utah
- Separate from any operating account(s)
Key Requirement: If engaged in listing or selling real estate, brokers must maintain at least one real estate trust account in a Utah financial institution.
Account Requirements
Interest-Bearing Rules
| Type | Rule |
|---|---|
| Default | Trust accounts shall be non-interest-bearing |
| Exception | May be interest-bearing IF parties agree in writing |
| Interest recipient | Must designate in writing who receives interest |
| Special rule | Interest may go to non-profit providing affordable housing grants in Utah |
Broker's Own Funds
| Rule | Details |
|---|---|
| Maximum broker deposit | $500 of broker's own funds |
| Purpose | To maintain the account or cover bank fees |
| Violation | Depositing more than $500 violates Utah law |
Critical: A principal broker who deposits more than $500 of their own funds into the trust account violates Subsection 61-2f-401(4)(b).
Deposit Restrictions
What Cannot Be Deposited
| Prohibited | Details |
|---|---|
| Short-term rental funds | Funds for tourist accommodations with rental periods less than 30 consecutive days |
| Excessive broker funds | More than $500 of broker's own money |
| Operating funds | Business operating funds |
Record Keeping and Reconciliation
Required Records
For each trust account, the principal broker must maintain:
| Record | Description |
|---|---|
| Date-sequential records | Record of each deposit and disbursement |
| Running balance | Current, running total of the balance |
| Final disposition records | Records detailing final disposition of all funds |
| Transaction balancing | Each closed transaction must balance to zero |
Reconciliation Requirements
| Requirement | Frequency |
|---|---|
| Bank/credit union reconciliation | At least monthly |
| Client account reconciliation | At least monthly |
| Record availability | Must make available to UDRE upon request |
Notification Requirements
If a trust account becomes out of balance:
| Requirement | Timeline |
|---|---|
| Notify UDRE | Within 30 days of receiving documentation |
| Exception | Only if imbalance cannot be cured within the 30-day period |
Property Management Trust Accounts
If a broker is regularly engaged in property management for seven or more individual units, additional requirements apply:
Separate Account Required
| Requirement | Details |
|---|---|
| Separate PM trust account | Must be separate from real estate trust account |
| Location | Utah bank or credit union |
| Account name | Must include company name and "Property Management Trust Account" (no abbreviations) |
Documentation Requirements
| Document | Requirements |
|---|---|
| Bank verification | Must be less than 30 days old |
| Account number | Must show entire account number |
| Signatory | Must show broker as signatory |
| Account name | Must include full company name |
Prohibited Practices
Commingling
Commingling is mixing client funds with broker's personal or business funds:
| Allowed | NOT Allowed |
|---|---|
| Client funds in trust account | Client funds in operating account |
| Up to $500 broker funds (account maintenance) | More than $500 broker funds |
| Interest earned per agreement | Using client funds for business |
Conversion
Conversion is using client funds for unauthorized purposes:
| Consequence | Description |
|---|---|
| License revocation | Likely outcome |
| Criminal charges | Possible prosecution |
| Civil liability | Lawsuits from harmed parties |
| UDRE enforcement | Fines and penalties |
Warning: In 2025, UDRE has increased enforcement focus on trust account violations and poor broker oversight.
What is the maximum amount of their own funds a Utah principal broker can deposit into a trust account?
How often must Utah brokers reconcile their trust account with bank records?
When is a Utah broker required to maintain a separate property management trust account?