Trust Accounts, Records, and Audits
Handling other people's money is one of the most tightly regulated parts of Washington practice, and the designated broker is accountable for it. This chapter covers trust-account handling and recordkeeping under WAC 308-124.
Depositing and Segregating Client Funds
Earnest money and other client funds must be deposited into the firm's trust (real estate) account and kept separate from the firm's operating and personal money. Commingling or converting trust funds is a serious violation of Washington license law. An affiliated broker who receives funds must deliver them to be handled through the firm trust account, not held personally.
Records and Reconciliation
WAC 308-124 requires the firm to keep trust-account records, including deposits, disbursements, and periodic reconciliations, that support a complete accounting of each client's funds. The designated broker is responsible for the accuracy and retention of these records for the required period.
Department Audits
The Department of Licensing may audit a firm's trust account and records. A managing broker's supervisory duty includes making sure the firm's trust handling would withstand an audit: funds properly deposited, records current, and reconciliations performed. Discrepancies can lead to discipline against both the responsible licensee and the designated broker.