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Trust Account Bookkeeping

  • Oct 20, 2022
  • 2 min read

Updated: Jun 15, 2025



What is Trust account accounting?

Trust account means to keep separate track of client funds in a separate bank account and this fund can only be used for the for clients assets/properties. As a property manager you manage the trust funds in a fiduciary relationship to your client or clients. The two main rules of trust accounting are :

  1. Funds in the trust must no commingle with your company's fund.

  2. The property manager must maintain accurate and detailed records of the money coming and out, and must use client's (owner's) money for their own matters (properties).



What is Commingling?

Commingling means mixing your client's (owner's) funds with your own company's funds.

A common example of commingling is depositing rents and security deposits on broker-owned or property manager's properties into the trust account. As these funds relate to the broker’s properties, they are not trust funds and, therefore, may not be deposited into the trust fund bank account. Likewise, the broker may not make mortgage payments and other payments on broker-owned properties from the trust account even if the broker reimburses the account for such payments. Conducting personal business through the trust account is strictly prohibited and is a violation of the Real Estate Law.



State Laws on real estate brokers and property managers.

Each state has specific guidelines for real estate brokers and property managers on how to maintain the account for the trust accounts.


For California Real Estate Trust accounting rules you can refer to below link:


For Washington you can refer to below link:


For State of Montana you can refer to:


For Maryland you can refer to:





 
 
 

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