Part 3 - Accounting, Records and Reporting Requirements

Division 2 - Requirements for Real Estate Brokerages


93 In this Division, a brokerage means a real estate brokerage.
  Oct 1/06

Real Estate Trade Records
94(1) A brokerage shall keep separate and have available at its registered business office in Alberta or the City of Lloydminster all records for each trade or potential trade including signed copies of each service agreement, purchase contract, real estate management agreement, lease, offer and all records, accounts and supporting documentation made in the course of the brokerage’s business in relation to trades or potential trades in real estate in Alberta.
94(2) The records, books, accounts and supporting documentation in relation to each trade or potential trade in real estate must identify each trade or potential trade including a property management agreement by a sequential code system and use that code for the corresponding trust ledger if applicable and must contain the following:
(a) the nature of the trade or potential trade;
(b) a description of the real estate;
(c) the true consideration for the trade or potential trade;
(d) the names of the parties to the trade or potential trade;
(e) the amount of deposit or other monies received, if any, and a record of the disbursement of it; and
(f) the amount of commission or other remuneration received, if any, and the name of the party paying it.
94(3) If the brokerage keeps in Alberta money received in trust in connection with other business, the brokerage shall keep it separate from money received in trust in connection with trades in real estate in Alberta.
  Oct 1/06

Brokerage Must Maintain Trust Account
95 When a brokerage in the course of its business receives funds on behalf of clients, it must:
(a) open and maintain at least one trust or pooled trust account for the deposit of funds received on behalf of clients or owners of real estate managed under real estate management agreements, and for the purpose of section 97 of these Rules;
(b) ensure that the broker is an authorized signing authority for each account in which monies are held in trust and controls the receipts and disbursements on each account;
(c) issue a written receipt if money is received in the form of cash;
(d) ensure that cheques used to disburse funds from a trust or pooled trust account are numbered and identified with the words “Trust Account”;
(e) account for all cheques, including but not limited to void cheques, as part of the records maintained by the brokerage;
(f) make every disbursement of money held in trust by cheque or bank transfer and these documents shall be cross-referenced in sufficient detail to permit them to be identified with the corresponding disbursement or disbursements recorded in the brokerage’s books required by section 25 of the Act or by these Rules; and
(g) not issue a cheque, allow a bank transfer or present a cheque for payment or collection unless there is in the account in which the monies are held in trust on which it is drawn, a sufficient credit balance, exclusive of tenants’ conditionally refundable deposits, to cover the cheque or transfer, or there is a written agreement between a financial institution and a client guaranteeing to the brokerage the payment of funds to ensure that there are sufficient funds to cover any disbursements from an account in which monies are held in trust.
  Jan 27/10

Unauthorized Payment From Trust
96 Subject to section 97 of these Rules, a brokerage shall not pay any of the brokerage’s personal or general office expenses, commission or other remuneration payable to the brokerage’s own authorized officials, brokers or associates out of an account in which money is held in trust.
  Oct 1/06, Resolution 2010-1

Payment of Commission From Trust
97(1) Subject to (2) below, all payments received by a brokerage as or on account of commission or other remuneration for a trade in real estate shall be classified as trust money and shall be paid into the brokerage’s trust account notwithstanding that the commission or remuneration may already have been earned, and, where applicable, the payments shall be recorded as being received in trust for the person liable to pay the commission or other remuneration.
97(2) Sub-section (1) above does not apply to a commission or other remuneration that is not to be shared between brokerages or to a share of a commission or other remuneration received from another brokerage.
97(3) Any money in a brokerage’s trust account which represents a commission or remuneration that has been earned and is no longer required to be held in trust shall be paid in accordance with the following rules:
(a) any share of such commission or remuneration payable to another brokerage shall be paid to that brokerage directly out of the trust account;
(b) after the payment pursuant to clause (a) has been made, the commission or remuneration shall be transferred into a brokerage account; and
(c) where a client fails to pay a commission or other remuneration in full when due, which is to be shared between two or more brokerages, the amount actually received shall be shared between them as they may agree and, in the absence of an agreement, the brokerage holding the commission may not withdraw any part into its brokerage account until the other brokerage or brokerages have been paid in full.
  Oct 1/06, Resolution 2010-1

Written Leases
98(1) All leases and rentals of real estate arranged by a brokerage shall be by a written lease.
98(2) In addition to the requirements of the Residential Tenancies Act, each lease shall contain at least:
(a) the name and business address of the landlord and the name and address of the tenant;
(b) the mailing address of the real estate or the unit number or designation of the real estate, the amount and payment conditions of the rent and the rental term; and
(c) the amount of and the terms for all money paid or to be paid by the tenant to the landlord, including but not limited to money for rent, prepaid rent, conditionally refundable deposits and any fees or other charges.
  Oct 1/06

99 A brokerage that leases or manages real estate on behalf of a client shall:
  (a) prepare and maintain a ledger for each tenant from whom the brokerage receives money;
  (b) identify the ledger with the name of the tenant and the mailing address of the real estate or the applicable unit number that designates the real estate;
  (c) post in the ledger an entry for each receipt of money from, or on behalf of, the tenant; and
  (d) for each entry posted in the ledger, record the amount of money received or disbursed as rent or conditionally refundable deposit, the date and the number of the receipt prepared with respect to the money, and the cheque number.
    Oct 1/06

Financial Statements
100(1) A brokerage shall prepare each month and keep on file with respect to each client:
(a) a statement of receipts and disbursements that records
  (i) the balance carried forward from the statement of the previous month,
  (ii) money and the amount received as rent for the use of real estate, for the control, management or administration of real estate and for any other trade in real estate,
  (iii) the amount of each disbursement and to whom it was made, and
  (iv) the balance at the end of the month; or
(b) any other statement the client requires.
100(2) A brokerage must provide the information referred to in this section within a reasonable period of time following a request from the client or as otherwise agreed to by the brokerage and the client.
  Oct 1/06

Pooled Disbursement Account
101 A pooled disbursement account may be used by a brokerage to make payments only if the following conditions are met:
  (a) only money that the brokerage receives in trust in respect of a trade in real estate may pass through the account;
  (b) disbursements on behalf of a client may be made only with a transfer forthwith of money held for the client from another trust account or pooled trust account to cover the disbursement; and
  (c) the account must be designated as a trust account.
    Oct 1/06

Positive Balance in Trust or Pooled Trust Accounts
102(1) In order to maintain an adequate positive balance in a trust or pooled trust account a brokerage may lend the brokerage’s own money to a client by paying the money into the account if:
(a) the loan is made pursuant to a written agreement between the brokerage and the client that specifies the maximum amount that may be lent, the rate of interest, if any, payable by the clients and the terms on which the brokerage may demand repayment;
(b) the outstanding amount of the loan and of the accrued interest, if any, is shown on each periodic statement rendered by the brokerage for the client; and
(c) the brokerage gives periodic statements to the client at least once every three months.
102(2) Money paid into a trust or pooled trust account by a brokerage pursuant to (1) above may not be withdrawn by the brokerage in repayment of the loan if the withdrawal would create a negative balance in the trust account or the client’s ledger.
102(3) Money received from a client in repayment of a loan under (1) above shall not be processed through a trust account or a pooled trust account.
  Oct 1/06

Brokerage Management Fees
103 If sufficient funds are available, a brokerage shall withdraw all earned management fees from the money held in trust on behalf of the client at least once each month, but not in advance unless otherwise provided in the real estate management agreement.
  Oct 1/06

Continue with Part 3 Division 3 - Requirements for Mortgage Brokerages

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