4.3 Brokerage Trust Accounts & Deposit Handling
Key Takeaways
Keep each client’s trust balance identifiable, segregate trust money from brokerage funds and disburse only under the Rules and written terms of trust.
The January 2026 AREA contract requires banking within three Business Days of receipt. Ministerial Regulation section 22 sets statutory defaults, and Act section 25 recognizes a written agreed period.
Rule 53(f) requires an associate to report a missing deposit to the broker. Rule 51 requires the broker to ensure immediate notice to all parties when a deposit is missing or dishonoured, in writing or confirmed in writing.
Under Rule 86, reconcile monthly and have the broker review, sign and date within 30 days of the prior month’s bank statement date. Rules 87–89 address negative ledgers and trust shortages.
Act section 69 governs pooled trust interest. Section 25(5) separately governs unclaimed principal held more than two years after entitlement when reasonable efforts cannot locate the recipient.
Brokerage trust accounts and purchase deposits
A brokerage that receives money in trust holds it for the people entitled under the written terms of trust. For an Alberta residential purchase, the parties identify a trustee and set deposit amounts, method, delivery deadlines and conditions for release. A trustee uses those instructions and the applicable law when banking or disbursing the money.
Receiving, safeguarding and recording trust money
Act sections 18 and 25 require agreed written trust terms and impose controls on a licensee required to keep a trust account. Under Rule 95, a real estate brokerage receiving client funds opens and maintains a trust or pooled trust account, and the broker must have signing authority and control receipts and disbursements. Keep trust funds separate from the brokerage’s own funds in a designated interest-bearing account at an eligible bank, loan or trust corporation, credit union or treasury branch. Act section 25 generally requires the deposit to be kept in Alberta and provides a Lloydminster exception where the stated business premises and account conditions are met. Issue a written receipt for cash. Rule 94 uses separate trade records and a sequential code that also identifies the trust ledger where applicable.
A pooled trust account can hold money for multiple transactions. The brokerage keeps the individual entitlements visible in separate records. Act section 69 and Ministerial Regulation section 8 govern interest. The institution is instructed to remit pooled trust interest, less allowable service charges, to the Alberta Real Estate Foundation at least quarterly. Section 69(4) excludes money held in a separate account for a party and security deposits under the applicable residential or mobile home site tenancy legislation. Check the terms and applicable law for a separate account. Under the January 2026 AREA residential purchase contract, clause 4.7 provides that neither seller nor buyer is paid interest on the deposits.
Unclaimed money is a separate issue. If a covered brokerage has held money for more than two years after the recipient became entitled to payment and cannot locate that person despite reasonable efforts, section 25(5) requires payment to the Foundation with written particulars. The Foundation must pay someone who later establishes entitlement.
Agree on deposit and release terms
Before the offer is made, discuss a deposit amount and delivery method the buyer can meet. A larger deposit gives the seller more funds available under the agreed terms if an applicable default occurs. It ties up more of the buyer’s cash and can increase the amount at stake. Agree on the trustee, amount, method, deadlines and release terms in writing. If the buyer expects their funds to arrive late, tell the broker promptly and discuss a different deadline or payment arrangement. Before signing, propose workable terms. Once bound, seek the seller’s agreement in writing before the deadline. The existing terms and required notices still apply if the parties do not agree to a change.
Delivery deadline, banking deadline and missed deposit notices
- Buyer’s delivery. Clauses 4.2–4.4 of the January 2026 AREA form identify the trustee, amount, method and agreed due date for each deposit. The buyer must deliver according to those terms.
- Trustee’s banking. Clause 4.6 of that form requires banking within three Business Days of receipt. Separately, Ministerial Regulation section 22 gives the statutory default of three business days from receipt, or three business days from acceptance for money received in trust for an offer to purchase. Act section 25(1)(b) recognizes an agreed period in writing. Read the executed terms before calculating the actual deadline.
- Notice. Under Rule 53(f), an associate or associate broker must notify the broker if the contemplated deposit was not received. Under Rule 51(1)(l)–(m), the broker ensures all parties are notified immediately if the deposit was not received or a received negotiable instrument was dishonoured. Give or confirm the notice in writing. Under standard clause 4.5, a late deposit gives the seller an option to void by written notice, which expires when the seller accepts the deposit.
Example. A trustee receives a deposit on Thursday, October 8 under the unmodified January 2026 AREA banking clause. Friday, October 9 is day one. The weekend and Thanksgiving Monday do not count. Tuesday, October 13 is day two and Wednesday, October 14 is day three. If a question instead specifies only the statutory default for an offer deposit and acceptance on Friday, the third business day after acceptance is Thursday, October 15. The source of the deadline determines the answer.
Controls over transactions and monthly reconciliation
| Control | What to do |
|---|---|
| Electronic cheque copies, Rule 83 | Obtain both front and back of disbursement cheques |
| Electronic deposits, Rule 84 | Keep the ABM receipt showing account, time, date and amount. For an Internet deposit, keep the signed and dated record of account, date, amount and details |
| ABM or Internet transfers, Rule 85 | Keep written support and the applicable ABM record or printed Internet transfer details. Use an ABM card without cash-withdrawal capability. The broker or authorized person reviews, signs and dates the transfer record that day or the next business day |
| Reconciliation, Rule 86 | Prepare a monthly reconciliation within 30 days of the date of the prior month’s bank statement. Identify individual balances and reconcile total trust liability to the reconciled bank balance. The broker reviews, signs and dates the reconciliation within that period |
| Negative ledger, Rule 87 | Reject a payment or transfer that would make a client’s or customer’s ledger negative, even if the pooled bank balance is positive |
| Trust shortage, Rules 88–89 | Deposit brokerage money as soon as the amount is determined. The broker gives written notice to the registrar if the shortage amount is still unknown or if the brokerage cannot fund it immediately. Give the required investigation steps or corrective action, respectively |
| Fiscal year reporting, Rules 90–92 | If money was received or held for others, file the brokerage representations and required accountant’s report within three months of year-end. Otherwise file the declaration respecting absence of trust transactions within the same period. RECA’s filing policy describes how to request a discretionary extension |
Disbursement and disputes
Act section 25(1)(d) requires disbursement according to the Rules and the agreed trust terms. Standard AREA clause 4.8 sets out when confirmed deposits go back to the buyer, are payable to the seller or are applied at completion, including any permitted application to the brokerage fee and payment of excess to the seller’s lawyer. A clear direction in the contract can authorize disbursement, including return when a condition was not satisfied or waived in time. A broker should not make an additional release a condition of paying money when the governing terms authorize payment.
Where the parties dispute the facts or the governing terms do not settle entitlement, secure the money and ask the broker to seek legal advice. A written agreement of the parties or a court order may resolve the dispute. For example, distinguish a documented failure to waive a buyer’s condition by the stated deadline from a seller’s unsupported assertion that a now-unconditional buyer defaulted. Apply the written direction and seek advice where its application is disputed or unclear.
Official sources
An Alberta brokerage named as trustee receives a buyer’s deposit on Thursday, October 8. The seller accepts the offer on Friday, October 9. The parties use clause 4.6 of the January 2026 AREA Residential Purchase Contract unchanged. Monday, October 12 is the Thanksgiving statutory holiday. What is the trustee’s latest banking day under that clause?
Tuesday, October 13
Thursday, October 15
Friday, October 16
Wednesday, October 14
Benchmark Realty maintains a pooled general real estate trust account at an approved Alberta financial institution, holding client earnest money deposits totaling $2,200,000. Over the annual reporting period, the pooled account generates $48,000 in interest. Buyer Caleb, whose $40,000 deposit was held in the account for four months prior to closing, demands his proportional share of the accrued interest from the brokerage. How is interest on pooled general trust accounts governed under the Real Estate Act?
The pooled account interest, less allowable service charges, goes to the Alberta Real Estate Foundation under section 69 and Ministerial Regulation section 8.
The brokerage must calculate Caleb's pro-rata share of interest and remit it to Caleb's conveyancing lawyer upon closing.
The brokerage retains 50% of the interest as an administrative handling fee and pays the remaining 50% to the seller.
All interest earned on pooled trust accounts is retained in the brokerage's operating account to offset monthly bank reconciliation expenses.
While preparing the monthly trust bank reconciliation under Rule 86, a broker discovers that a clerical error caused a $3,500 disbursement in excess of one client's trust ledger balance, creating a negative balance in that individual client ledger and an exact $3,500 trust shortage. The brokerage has sufficient funds in its operating account to cover the amount immediately. How must the broker proceed under Part 3 of the Real Estate Act Rules?
Leave the negative ledger balance until the next client deposit arrives, as long as the overall pooled trust bank balance remains positive.
Recognize that payments or transfers creating a negative individual client trust ledger balance are strictly prohibited under Rule 87, and immediately deposit $3,500 of the brokerage's own operating money into the trust account under Rule 88 because the exact shortage amount is determined.
Wait until the fiscal year-end Accountant's Report under Rules 90–91 to disclose the $3,500 shortage without depositing operating funds.
Transfer $3,500 from another client's surplus trust ledger to cover the shortfall and note the adjustment on the next 30-day reconciliation.
Sections you finish are checked off in the contents.