ADRE LAW BOOK 2025

ARTICLE 3 - REGULATION

32-2151. Disposition of funds; trust money deposit requirements Amended by Ariz. Sess. Laws Ch. 52, (2024)

A. Unless otherwise provided in writing by all parties to a transaction, any licensed real estate bro ker who does not immediately place all monies entrusted to the broker, in the broker’s capacity as a real estate broker, in a neutral escrow depository in this state shall on receipt place all such monies in a trust fund account in a federally insured or guaranteed account in a depository located in this state. The commissioner may adopt such rules as are necessary to provide for records to be main tained and the manner in which such trust fund account deposits may be made. B. The following minimum requirements apply to each broker’s trust fund account: 1. The broker shall make deposits to trust fund accounts by deposit slips. Receipts or other documentation shall identify each transaction, the date and the amount of each deposit and the names of parties involved in the transaction represented by the deposit and monies shall be used only for the purpose for which the monies were deposited. 2. The broker shall retain a complete record of all monies received in connection with a real estate transaction electronically or electronically or in the main or branch office of the designated broker in this state or at an off-site storage location in this state if the broker provides prior written notification of the street address of the off-site storage location to the department. A bro ker’s records shall be kept according to generally accepted accounting principles and shall include properly descriptive receipts and a disbursement journal and client ledger. The broker shall keep any computerized records in a manner allowing reconstruction in the event of destruction of electronic data. 3. On a monthly basis the broker must complete a three-way reconciliation between the trust fund account bank statements, client ledgers and trust fund account ledgers and pro vide an explanation for any variation. C. A variation that is caused by any of the following acts or omissions is a violation of this chapter: 1. Failing to remove any interest that is earned on a trust fund account at least once every twelve months. 2. Allowing advance payment of monies belonging to others to be deposited in the broker’s personal account or to be commingled with personal monies. For the purposes of this para graph, it is not commingling if a broker deposits personal monies of not more than $5,000 to keep the account open or to avoid charges for an insufficient minimum balance. 3. Failing to identify monies as nonowner tenant monies in descriptive receipts. 4. Failing to maintain separate ledgers for each property. 5. Failing to regularly complete a three-way reconciliation as required by subsection B, paragraph 3 of this section. 6. Transferring monies between accounts that are owned by different persons unless each person consents in writing. 7. Failing to create checks and balances.

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