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Monthly Reconciliation Statement

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Education & Training with Rowlett Real Estate School

At least monthly, a broker must prepare a written statement comparing the total trust liability with each trust account's reconciled bank balance. The minimum information the broker must include in the monthly reconciliation statement follows:

·    date the reconciliation was conducted;

·    date used to reconcile the balances;

·    name of the bank or other authorized financial institution;

·    name of  the account;

·    account number;

·    account balance and date;

·    outstanding checks identified by date and number; • itemized list of the broker's trust liability;

·    deposits in transit identified by date and amount; and

·    any other items necessary to reconcile the bank account balance with the bal­ance according to the broker's checkbook and other trust account books and records disclosing the funds' date of receipt and source.

 The broker must review, sign, and date the monthly reconciliation statement.

To complete the monthly reconciliation, the broker begins by determining the trust liability. Trust liability is defined as the total sum of all deposits received, pending, and being held by the broker at any point in time. It is other people's monies placed with the broker that correspond to specific real estate transactions—sales or property manage­ment. For sales escrow accounts, the trust liability includes all earnest money deposits.

 

With respect to property management escrow accounts, the trust liability may include, for example, undisbursed rents, owner reserves, security deposits, and any other funds col­lected that would benefit the lessor or lessee—that is, the total monies the broker holds for others at the reconciliation cutoff date.

 

Posted by

Captain Wayne Rowlett GSI
Rowlett Real Estate School

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