Transaction Coordination

Real Estate Trust Account Rules: Commingling, Deposits, Reconciliation and Records

How broker trust and escrow accounts work: what counts as commingling and conversion, how fast earnest money must be deposited, monthly reconciliation, how long records are kept and how audits work, with California, Texas, Florida and Colorado rules.

Ijharul Islam October 30, 2026 9 min read

A real estate trust account (also called an escrow account) is a separate bank account where a broker holds other people's money, such as earnest money, rents and security deposits. State rules ban commingling it with the broker's own funds, set short deposit deadlines (two to three business days in Texas, California and Florida) and require multi-year records.

More on this topic: TC and brokerage operations, every guide in one place.

The details differ by state, so a rule you learned in one state may not hold in the next. Below we cover what belongs in a trust account, commingling and conversion, deposit deadlines, reconciliation, record retention and audits, with the actual rules from California, Texas, Florida and Colorado. Many deals never touch a broker's account because a title company, escrow company or attorney holds the money instead; escrow vs title company explains who does what.

Key takeaways

Trust money is anyone else's money the broker holds. Texas defines it as client money, earnest money, rent, unearned fees, security deposits or any money held on behalf of another person.
Commingling (mixing trust money with the broker's own) is banned everywhere; the small allowances are spelled out: up to $200 for bank charges in California, $1,000 per sales escrow account in Florida, a reasonable amount for fees in Texas.
Deposit deadlines are short: Texas, by the close of the second working day after the broker receives it; California and Florida, within three business days.
California and Florida require a written reconciliation at least monthly.
Records: 3 years in California, 4 in Texas and Colorado, 5 in Florida.

What is a broker trust account?

It's a bank account in the brokerage's name, set up as a fiduciary account, that holds money belonging to clients and customers until it's paid out under the contract. Typical contents: earnest money the brokerage holds as escrow agent, rents and security deposits on property it manages, and advance fees.

Two points people miss. First, the account has to be set up as a trust account with the bank, not just named like one: Colorado's Division of Real Estate warns that an account must be correctly titled in the bank's depository agreement and signature cards, and that a generic label may not qualify. Second, not every brokerage needs one. Texas lets trust money be delivered to an authorized escrow agent under the principals' agreement instead of a broker account, and in many markets the purchase contract names a title or escrow company as the earnest money holder.

What are commingling and conversion in real estate?

Commingling is mixing trust money with the broker's own money. Conversion is using trust money for something other than its purpose, such as paying the brokerage's bills. Commingling can happen by accident; conversion is the misuse itself, and it's treated as far more serious.

How the rules read:

Texas: a broker may not commingle trust money with personal or other non-trust money. Putting trust money in a personal or operating account, or withdrawing it for anything other than a proper disbursement (such as operating expenses), is prima facie evidence of commingling. A broker may keep a reasonable amount in the account to cover bank fees, with records, and must remove money it becomes entitled to, such as its commission, within 30 days (22 TAC 535.146).
California: it isn't commingling to keep up to $200 in the account for service charges, or to deposit mixed funds where the broker's share is disbursed no later than 25 days after deposit (10 CCR 2835).
Florida: a broker may keep up to $1,000 of personal or brokerage funds in each sales escrow account and up to $5,000 in each property management escrow account (Rule 61J2-14.010).
Colorado: all money belonging to others must be kept in accounts separate from the broker's or firm's money (Commission Rule 5.2, per the Division's advisory).

How fast must a broker deposit earnest money?

Fast, and the clock usually starts at receipt, not at closing:

State	Deposit deadline	Other timing rules	Source
Texas	No later than the close of business of the second working day after the broker receives the trust money, unless the principals agree otherwise in writing	A sales agent must deliver trust money to the sponsoring broker immediately	22 TAC 535.146(b)
California	Within three business days after receipt by the broker or the broker's salesperson: to the owner, a neutral escrow depository or the broker's trust account	An offeror's check may be held uncashed until acceptance if it's non-negotiable or the buyer gave written instructions, and the seller is told; then within three business days of acceptance	10 CCR 2832
Florida	“Immediately,” defined as no later than the end of the third business day after receipt (weekends and legal holidays excluded)	If a title company or attorney holds the deposit, the broker must request written verification of receipt within 10 business days after it's due, then pass it on to the seller's broker	Rule 61J2-14.008

These rules sit alongside the purchase contract's own earnest money deadline, which sets when the buyer must deliver the money. Track both: see earnest money deadlines, and the earnest money calculator for the amount.

How often must a trust account be reconciled?

At least monthly in the states that spell it out:

California: the broker reconciles each beneficiary's or transaction's record against the record of all trust funds received and disbursed at least once a month (except months with no activity), and keeps a written record of each reconciliation showing the account, the date, the beneficiaries or transactions and the broker's liability to each (10 CCR 2831.2).
Florida: once a month the broker must have a written statement made comparing total trust liability with the reconciled bank balances, and must review, sign and date it. Any difference needs an explanation and the corrective action taken (Rule 61J2-14.012).
Texas: the rule we read requires a record of every deposit and withdrawal and an accounting to each beneficiary at least monthly when there's been activity; it doesn't set a reconciliation schedule, so a monthly reconciliation is good practice rather than a quoted rule.

A monthly three-way check (bank statement, account ledger, and the total of every individual beneficiary's balance) catches the two classic problems: a shortage, where one client's money covers another's, and unexplained overages, which often mean the broker's own money is in the account.

How long must trust account records be kept?

State	How long	Source
California	3 years from closing (or from the listing date if the deal isn't consummated)	Bus. & Prof. Code 10148
Texas	4 years from the date each trust account document is received or created	22 TAC 535.146(e); broker records generally under 535.2(h)
Colorado	4 years	C.R.S. 12-10-217(1)(k)
Florida	5 years	Fla. Stat. 475.5015

Keep bank statements, deposit records, ledgers, reconciliations and disbursement records together, and longer if a file is in dispute. Our guide to document retention requirements by state covers the transaction file itself.

What happens in a trust account audit?

Regulators can inspect a brokerage's records. In California, after notice, records must be made available to the Real Estate Commissioner for examination, inspection and copying during business hours, and the broker is charged for the cost of the audit if a final decision finds a violation of the trust fund statute (Section 10145) or its regulations (Bus. & Prof. Code 10148).

To be ready on any day: keep reconciliations current and signed, have a ledger for every beneficiary, match every disbursement to a written instruction or closing statement, keep the bank's account documents showing the trust title, and be able to explain every dollar of broker money in the account against your state's allowance.

What happens to disputed earnest money in a trust account?

The broker holds it until the parties agree in writing, a court orders it, or the state's procedure allows release. Texas lets a broker who can't reasonably determine who is entitled to the money pay it into the registry of a court and interplead the parties (22 TAC 535.146(d)). Paying it out to one side without authority is how a dispute becomes a complaint. More in earnest money disputes.

What's the transaction coordinator's role with trust money?

Tracking, not handling. A TC confirms when earnest money is due under the contract, collects the receipt from whoever holds it, notes it in the file and flags a late deposit to the agent and broker. The broker is responsible for the account; in Texas any trust money a sales agent receives goes to the sponsoring broker immediately.

Closingbird isn't trust accounting software and doesn't keep a ledger. It reads the earnest money amount and deadline from the executed contract, puts the deadline on the file's Deal Trail with a morning reminder to its owner, and the deposit receipt can be a required document on every file, so the broker's broker compliance file review checklist starts with proof the deposit arrived.

Frequently asked questions

Is a trust account the same as an escrow account?

In real estate the terms are used interchangeably for a broker's account holding other people's money. Florida's rules define a trust or escrow account together. A title or escrow company's escrow account is a different thing, held by that company.

Can a broker keep its own money in the trust account?

Only the small amounts the rules allow: up to $200 for bank charges in California, up to $1,000 per sales escrow account in Florida, and a reasonable amount for bank fees in Texas, with records kept.

Can a broker pay its commission out of the trust account?

Once the commission is earned and disbursement is authorized, yes, but it must then leave the account promptly. Texas requires money the broker owns to be removed within 30 days; California's mixed-funds rule allows up to 25 days.

What happens if a broker commingles funds?

It breaks your state's trust account rules and can lead to license discipline; in California the broker also pays for the audit when a violation is found. Correct it at once, document the correction and talk to your broker or attorney.

Does every brokerage need a trust account?

No. A brokerage that never holds other people's money, because title, escrow or an attorney holds earnest money, may not need one. Check your state's rules and your contracts.

Who reconciles the trust account?

The broker is responsible, even if a bookkeeper does the work. Florida requires the broker to review, sign and date the monthly reconciliation.

Never miss an earnest money deadline

Closingbird reads the earnest money amount and deadline from the executed contract, reminds the right person the morning it's due and tracks the receipt on the file for compliance review. Start a free trial (14-day free trial, no credit card required) or see pricing.

Sources

Checked in October 2026. Rules and prices change, and many vary by state, so confirm with the source, your state's real estate commission or your broker before you rely on them.

#trust accounts #brokerage compliance #earnest money