As a real estate broker (or salesman), "What should I do with earnest money deposits, security deposits, and rents received from properties which I own?"

Despite our best efforts to answer this frequently asked question (See last is~ue of BULLETIN), many brokers and salesmen still,,seem to be confused as to where to deposit these funds. The following explanation is a further attempt to help you better understand what you should do should you find yourself in one of the situations listed below.

When reading this explanation, remember that the term "sole owner" includes ownership with your spouse; that the term "trust money" refers to earnest money deposits, tenant security deposits, and rental money; and that the term "brokerage trust account" refers to the trust account or escrow account which you use in your brokerage practice to hold money for others.

1. If you are the sole owner of the property-do not deposit the trust money in your brokerage trust account. (You may, however, open another trust account for such money; tenant security deposits on residential property which you own must be deposited in such other trust account.)

2. If you are the sole owner of the property but another broker (e.g., a "selling broker") receives the trust money-the other broker must deposit the trust money in his/her brokerage trust account.

3. If you own the property with persons other than your spouse and you are acting as agent for the other owners--deposit the trust money in your brokerage trust account

4. If you own stock in a corportion which owns the property-deposit the trust money in your brokerage trust account; however, if the corporation itself is licensed as a real estate broker, then do not deposit the trust money in the corporation's brokerage trust account.

The sales agreement or lease should clearly state in whose account the money will be held so that all persons who have an interest in the money will know whom to hold responsible for its safe-keeping.