Or. Admin. R. 863-015-0255

Current through Register Vol. 63, No. 6, June 1, 2024

Section 863-015-0255 - Clients' Trust Account Records Requirements and Document Transmittal Requirements

(1) This rule applies to clients' trust fund accounts that hold funds from transactions involving the sale, purchase, lease option, or exchange of real property. The purpose of clients' trust accounts is to preserve clients' monies and keep them segregated from the broker's general and personal funds.

(2) Principal brokers must retain and store the records described in this rule as required by OAR 863-015-0250 and 863-015-0260. However, where separate general business or clients' trust accounts or both are maintained at branch offices, the financial records described in this rule may be maintained and located either at the principal broker's main office or, if the principal real estate principal broker or branch office manager conducts the real estate business from that branch office, at that branch office.

(3) A real estate broker must transmit to the real estate broker's principal real estate broker within three banking days of receipt any money, checks, drafts, warrants, promissory notes, or other consideration and any documents received by the licensee in any professional real estate activity in which the licensee is engaged. Absent the buyer's written instructions to the contrary, the real estate broker must transmit all earnest monies to the principal real estate broker within three banking days of receipt.

(4) If a real estate broker or principal broker receives a check as earnest money in a transaction, he or she may hold the check un-deposited until the offer is accepted or rejected, provided that the written sale agreement states that the real estate broker or principal broker is holding the check un-deposited and further states where and when the check will be deposited upon acceptance of the offer.

(5) The real estate broker or principal broker must deposit a check held pursuant to section (4) into a clients' trust account established under ORS 696.241 or transmit the check to a licensed neutral escrow depository located within this state before the close of the third banking day following acceptance of the offer or a subsequent counter offer. The principal broker must track the earnest money deposit from the buyer to the principal broker and to the escrow depository.

(6) All other funds, whether in the form of money, checks, drafts, or warrants belonging to others and accepted by any real estate broker or principal broker while engaged in professional real estate activity, must be deposited before the close of business of the fifth banking day following the date the real estate broker or principal broker receives the funds into a neutral escrow depository located within this state or into a clients' trust account established under ORS 696.241. The principal broker must retain a copy of each executed agreement required under ORS 696.241 and OAR 863-015-0265 for interest-bearing clients' trust accounts.

(7) For all funds received under sections (3) and (4) of this rule, the principal broker must comply with the following requirements:

(a) Account for all funds received,

(b) Maintain a copy of any check received, and

(c) Maintain a dated, acknowledged receipt for any check returned to the offeror.

(8) Every deposit made under ORS 696.241 must be made with deposit slips identifying each offer or transaction by a written notation of the file reference assigned to the offer or transaction.

(9) Principal brokers must maintain a complete ledger account and record all funds received in their professional real estate activity. This ledger account must show:

(a) From whom the funds were received,

(b) The date the funds were received,

(c) The date the funds were deposited,

(d) Where the funds were deposited, and

(e) When the transaction has been completed or the offer has failed, the final disposition of the funds.

(10) If a real estate licensee is a principal in an offer or transaction, all earnest money or other deposits must be handled as provided in OAR 863-015-0145.

(11) Checks used to disburse funds from a clients' trust account must be pre-numbered, issued from one numbering sequence, and bear the words "Clients' Trust Account" upon the face thereof. Principal brokers must account for all checks, including voided checks, as a part of the records they maintain.

(12) Principal brokers must record and track the transfer of promissory notes and other forms of consideration by a ledger account or by other means including, but not limited to, written proof of transmittal or receipt retained in their offer or transaction file.

(13) If a principal broker accepts a credit card payment as funds in a real estate transaction:

(a) The face amount of the credit card payment, without reducing the face amount by any merchant's discount and processing fee charged to the principal broker, is the amount he or she must maintain, use, and refund as necessary; or

(b) The face amount of the credit card payment, reduced by any merchant's discount and processing fee, may be maintained and used by the principal broker when he or she has a separate written agreement signed by the credit card user authorizing this reduction. The face amount, including any merchant's discount and processing fees paid by the credit card user, must be refunded to the credit card user when a refund is necessary;

(c) The principal broker may not benefit from any of the merchant's discounts or processing fees generated by the use of a credit card;

(d) A principal broker's clients' trust account may not be charged or debited for any merchant's discount or processing fees for use of the credit card in such transaction.

(14) All funds deposited into a clients' trust account established under ORS 696.241 and not disbursed or transferred to a neutral escrow depository pursuant to the sale agreement may only be disbursed:

(a) To individuals, as directed by order of court of competent jurisdiction;

(b) To individuals, as directed in writing by one or more principals; or

(c) To the court, upon filing by the principal broker of an interpleader action for disputed earnest money funds.

(15) A principal broker may not use any form of debit card on clients' trust accounts.

Or. Admin. R. 863-015-0255

REA 1-2002, f. 5-31-02, cert. ef. 7-1-02; REA 1-2003(Temp), f. 2-27-03, cert. ef. 2-28-03 thru 8-27-03; REA 3-2003, f. 7-28-03, cert. ef. 8-1-03; REA 6-2008, f. 12-15-08, cert. ef. 1-1-09; REA 1-2009, f. 12-15-09, cert. ef. 1-1-10

Stat. Auth.: ORS 696.385

Stats. Implemented: ORS 696.241 & 696.280