Escrow or Trust Account and a Separate Property Management Escrow Account Required

PURPOSE: This rule removes any uncertainty as to how monies received in connection with the management or rental of real estate are required to be maintained. A broker must establish and maintain a separate escrow account as a property management escrow account to act as an operating account for the rental property(ies) managed. A broker must deposit in this account current rents and monies received for payments to third parties. A broker may establish and maintain additional property management escrow accounts as needed, provided the broker complies with this rule and section 339.105, RSMo. A broker is also required to deposit into an escrow account, other than the property management escrow account, security deposits and any rent, other than current rent, and to maintain these funds intact. This rule also requires a salesperson to immediately deliver to the broker money received in connection with property management. This rule makes other specific requirements for the handling of escrowed funds. (1) A broker shall establish and maintain a separate escrow account(s), to be designated as a property management escrow account(s), for the deposit of current rents and money received from the owner(s) or on the owner’s(s’) behalf for payment of expenses related to property management. Before making disbursements from a property management escrow account, a broker shall ensure that the account balance for that owner’s(s’) property(ies) is sufficient to cover the disbursements. (2) All security deposits held by a broker shall be maintained, intact, in an escrow account other than the property management account(s), pursuant to section 339.105, RSMo, unless the owner(s) have agreed otherwise in writing. (3) All money received by a broker in connection with any property management must be deposited within ten (10) banking days to the escrow or trust account maintained by the broker. (4) A property manager shall immediately deliver to the supervising broker all money received in connection with any property management. (5) The property management escrow account(s) maintained AND INSURANCE by the broker shall be an account in a bank, savings and loan, or credit union. (6) Fees or commissions payable to a broker must be withdrawn from a property management escrow account at least once a month unless otherwise agreed in writing. Any rent paid in advance as a deposit for the last month’s rent or as rent other than the current month’s rent held by a broker shall be deposited in the property management escrow account unless otherwise agreed to in writing. (7) In addition to the notification required by section 339.105.2, RSMo, each broker, upon the request of the commission or its agent, shall consent to the examination and audit of the broker’s property management escrow account(s) by the commission or its agent. As part of the consent, each broker shall execute a form presented to him/her by the commission or its agent entitled Consent to Examine and Audit Escrow or Trust Account. (8) Each check written on an escrow account, or each corresponding check stub, or other record of disbursement of funds from the account and each deposit ticket shall indicate the related transaction. Each check written on an escrow account for licensee fees or commission shall be made payable to the licensee who is owed the fee or commission or to the firm’s general operating account. AUTHORITY: sections 339.120 and 339.105, RSMo Supp. 2008.* This rule originally filed as 4 CSR 250-8.220. Original rule filed June 14, 1988, effective Feb. 19, 1989. Amended: Filed Feb. 2, 1994, effective Aug. 28, 1994. Amended: Filed June 28, 2002, effective Dec. 30, 2002. Moved to 20 CSR 2250-8.220, effective Aug. 28, 2006. Amended: Filed April 3, 2009, effective Sept. 30, 2009. *Original authority: 339.120, RSMo 1941, amended 1963, 1967, 1981, 1988, 1993, 1995, 1999, 2004, 2008 and 339.105, RSMo 1978, amended 1981, 1986, 1987, 2003, 2004.