4.1 Nevada Trust Account Requirements
Key Takeaways
- Under NRS 645.310 a broker must deposit funds belonging to others into a designated trust account in a Nevada bank or credit union before the end of the next banking day after acceptance, unless the purchase agreement directs otherwise.
- Property management requires TWO separate trust accounts maintained under the property-management permit: one for rent and operating funds and one used SOLELY for security deposits.
- Trust accounts must be reconciled monthly within 30 days of the bank statement date, and the broker must sign the reconciliation even if a designee prepares it.
- A broker who lets a trust account remain in deficit for more than 45 consecutive days is subject to discipline under NRS 645.310.
- Commingling broker funds with client funds and conversion (unauthorized use of client funds) are serious violations; records must be kept at least 5 years (NAC 645.650).
Trust Account Fundamentals (NRS 645.310)
When a Nevada broker receives money that belongs to others — earnest money, rents, security deposits, advance fees, or closing proceeds — NRS 645.310 requires it to be deposited "promptly" into a separate trust account (also called an escrow account) located in a Nevada bank or credit union and clearly designated as a trust account. The broker is the trustee; the client is the beneficial owner. The broker never owns trust money even for a moment.
Deposit Deadline
The single most tested logistics fact: a broker who fails to deposit a check or cash received as earnest money before the end of the next banking day after the offer is accepted commits grounds for discipline — unless the purchase agreement expressly says the deposit is held elsewhere or until acceptance. A salesperson must turn funds over to the broker promptly; the salesperson never holds client money personally.
| Fund received | Where it goes | When |
|---|---|---|
| Earnest money deposit | Broker trust account | By end of next banking day after acceptance |
| Rent collected for owner | Property-management rent account | Promptly per agreement |
| Security deposit | Separate security-deposit account | Promptly; held SOLELY as deposits |
| Advance fee | Trust account | Before any service is rendered |
Account Setup Rules
| Requirement | Detail |
|---|---|
| Location | Bank or credit union physically in Nevada |
| Label | Must be designated "trust" or "escrow" |
| Withdrawals | Payable on demand, no penalty for early withdrawal |
| Signature | Broker (or authorized signer) controls withdrawals |
| Interest | Belongs to clients unless all interested parties agree otherwise in writing |
Trap: Out-of-state banks are not allowed. The account must be in Nevada even if the brokerage is multi-state.
Property Management: Two Accounts
A broker who manages rentals must hold a property-management permit and maintain two distinct trust accounts.
| Account | Purpose | Forbidden use |
|---|---|---|
| Rental/operating account | Rent, owner draws, repair payments | Holding tenant security deposits |
| Security-deposit account | Tenant security deposits only | Paying operating expenses or owner draws |
Each owner and each property gets its own ledger, even when one owner holds several units, so the balance attributable to every party can be proven at any moment. A worked example: a manager collecting $1,800 rent and a $1,800 deposit on one unit posts $1,800 to the operating ledger and $1,800 to the deposit account ledger — the two never touch.
Reconciliation
Monthly Reconciliation
The broker must reconcile every trust account each month, matching three figures: the bank statement balance, the checkbook/control balance, and the sum of all individual client ledgers. All three must agree.
| Item | Rule |
|---|---|
| Frequency | Monthly |
| Deadline | Within 30 days of the bank statement date |
| Three-way tie-out | Bank = book = sum of ledgers |
| Broker sign-off | Broker must review and sign even if a designee prepares it |
Deficit Accounts
A shortage means the account holds less than the total owed to clients — a red flag for conversion. A broker who permits a deficit to persist for more than 45 consecutive days is subject to discipline under NRS 645.310. Any deficit is serious; a prolonged one invites suspension or revocation.
| Situation | Consequence |
|---|---|
| Deficit over 45 consecutive days | Express statutory grounds for discipline |
| Any shortage of client funds | Serious violation, audit trigger |
| Repeated shortages | Suspension or revocation |
Permitted vs. Prohibited
Commingling is mixing client funds with the broker's own money; conversion is spending client funds for an unauthorized purpose. Both are prohibited.
| Permitted | Prohibited |
|---|---|
| A small broker deposit to cover bank fees / keep the account open | Parking operating cash in the trust account |
| Client funds in the trust account | Client funds in the brokerage operating account |
| Disbursing per written instructions | Using earnest money for office expenses |
Tested distinction: Commingling can occur without anyone losing a dollar (just mixing the money). Conversion requires the broker actually using client money. Conversion can bring criminal charges and Recovery Fund claims; commingling alone is usually administrative.
Recordkeeping and Audits
Nevada requires complete real estate and property-management records — bank statements, deposit slips, disbursement records, client ledgers, reconciliations, and even offers that were never accepted — to be kept at least 5 years after closing or the last activity on the property (NAC 645.650). The Division must be told where records are kept and notified before they are moved.
| Record | Retention |
|---|---|
| Trust account ledgers & reconciliations | 5 years minimum |
| Transaction files (incl. rejected offers) | 5 years minimum |
The Real Estate Division (NRED) may audit a trust account at any time during business hours. Common audit findings include shortages, missing monthly reconciliations, late deposits, commingling, and poor ledgers — ranging from a warning up to revocation depending on severity and harm.
Under NRS 645.310, by when must a Nevada broker deposit earnest money received after an offer is accepted, absent contrary terms in the purchase agreement?
How many separate trust accounts must a Nevada property manager maintain?
A trust account shows less money than the brokerage owes all of its clients combined, and it stays that way for two months. What rule has the broker most directly violated?