4.1 Maine Trust Account Requirements

Who Controls the Account

Under Maine Real Estate Commission (MREC) rule 02-039 C.M.R. ch. 400, only the designated broker — the individual responsible for a brokerage agency's operations — may open, sign on, and control a real estate trust account. This is the single most-tested concept in the chapter, because Maine's three-tier license structure (sales agent, associate broker, designated broker) puts custody of money solely with the designated broker.

An affiliated licensee (sales agent or associate broker) who receives a buyer's check must promptly deliver it to the designated broker; the licensee never deposits client money into a personal or office operating account. A sole proprietor broker is still the designated broker for trust purposes.

Funds That Must Go Into Trust

A real estate trust account holds money the broker is handling for others, never the broker's own earnings. Commission already earned is the broker's money and belongs in the operating account.

Account Titling and Location

The account is opened at a banking institution (bank, savings institution, or credit union — Maine does not require it be Maine-chartered, but it must produce statements). Checks and statements must be imprinted with the words "real estate trust account" and carry the brokerage's licensed trade name, so an examiner and the bank both know the funds are fiduciary, not operating, money.

Trap: A correctly titled account is not enough — the printed checks must also bear the "real estate trust account" wording. Candidates often pick "any account titled with the broker's name," which is wrong.

Deposit Timeline and the 5-Business-Day Rule

Maine sets a bright-line deposit deadline: earnest money and other client funds must be deposited into the trust account within 5 business days — counted from the day the designated broker accepts the funds, or from the day a trustee (such as an attorney holding the money) receives them. "Business days" exclude weekends and legal holidays.

Worked example: A buyer's $10,000 earnest-money check is handed to a sales agent on Friday. The agent delivers it to the designated broker on Monday. The 5-business-day clock for deposit runs from when the designated broker accepted the funds (Monday), so the broker must deposit it by the following Monday. Holding it longer — or letting the agent "sit on it" — is a violation regardless of the contract's own language.

Commingling: the $500 Exception

Commingling means mixing client money with the broker's personal or agency funds, and it is prohibited. Maine carves out one narrow exception: the designated broker may deposit and keep up to $500 of the broker's own (agency) funds in the trust account to cover bank service charges and keep the account open. Anything above that — or routing client funds through the operating account — is commingling.

Conversion is a step worse than commingling: it is using client money for an unauthorized purpose (paying rent, payroll, a car loan). Conversion can trigger license revocation, civil liability, and criminal prosecution, not merely a fine.

Disbursement

Funds are disbursed only per the contract terms or a written mutual authorization from the parties. When a transaction concludes, the designated broker must disburse the funds within 30 days. If buyer and seller dispute who gets the earnest money, the broker holds the funds and may not unilaterally pick a winner; the dispute is resolved by the parties' written agreement or by a court.

• Disputed earnest money: keep it in trust until written agreement or court order.
• Failed deal, clean release: return to the buyer per the contract.
• Closed deal: apply per the settlement statement.

Records, Ledgers, and the 3-Year Rule

Maine requires the designated broker to keep records that let MREC trace every dollar in and out of the trust account. The central document is the client ledger: a separate running record for each transaction showing deposits, withdrawals, the purpose of each entry, and a running balance.

Retention Period

Maine's rule requires trust-account ledger and reconciliation records be kept for at least 3 years after the funds are disbursed or the transaction concludes, whichever is later. (Rejected offers and counteroffers have their own 1-year retention.) Records may be kept electronically as long as they can be retrieved and legibly printed.

Common stale-fact correction: Older Maine prep materials say "6 years." The current MREC rule is 3 years for trust-account records — memorize 3, not 6.

Reconciliation

The broker must reconcile the trust account so three numbers agree: the bank balance, the checkbook/register balance, and the total of all client ledgers. A properly reconciled trust account never shows a shortage (less money than owed to clients).

1. Compare the bank statement to the register.
2. Add deposits in transit; subtract outstanding checks.
3. Sum every client ledger balance.
4. Confirm bank-adjusted balance equals the ledger total.
5. Date and retain the reconciliation.

MREC may audit a trust account at any time, without prior notice, and inspect all records during an investigation. Because the designated broker is personally accountable for the account, a sloppy agent's deposit error becomes the broker's discipline problem — which is why supervision and the trust account are tested together.