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?
Within 30 days of acceptance
Before the end of the next banking day after acceptance
Within 5 business days of closing
Only after both parties sign the closing statement
How many separate trust accounts must a Nevada property manager maintain?
One account for all funds
Two accounts: one for rent/operating funds and one solely for security deposits
Three accounts: rent, deposits, and earnest money
No trust account is required for rentals
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?
The requirement to use a Nevada bank
The ban on advance fees
The rule against permitting a deficit for more than 45 consecutive days
The 5-year record retention rule
Sections you finish are checked off in the contents.