Real Estate Broker Trust Account Requirements by State

Real estate broker trust account requirements are set state by state, and the states do not agree with each other about anything important. Whether you need an account. Who is allowed to hold the money. How many days you have. Whether the account may earn interest, and who gets it if it does.

Here is the single fact that tells you how much variation there is. Ohio's statute says a broker's escrow account "shall be noninterest-bearing." Washington's statute requires a pooled interest-bearing account and sends the interest to the state. Same money, same purpose, two states, opposite commands.

So the answer to "what are the rules" is that you need your own state's, from the rule text, before you accept a single deposit. What follows is what sixteen states say, read from their statutes and commission rules, organized around the questions a new broker actually has.

Do you need a trust account at all?

Usually only if you hold money belonging to other people, which is not the same as always.

South Dakota is the outlier and it is worth knowing about even if you never practice there. The South Dakota Real Estate Commission states plainly on its own site that "South Dakota license law does not require a broker to maintain a trust account but brokers may establish a checking account for the purpose of maintaining earnest money." No mandate. But the moment you have one, the duty attaches: failing to reconcile it monthly violates SDCL 36-21A-80, which requires that "the account shall be reconciled to the bank statements, trust ledger, and check register at least monthly."

Everywhere else the duty is conditional on receipt. Washington's RCW 18.85.285(6) is explicit that "a firm is not required to maintain a trust fund account for transactions concerning a purchase and sale agreement that instructs the broker to deliver the earnest money check directly to a named closing agent or to the seller."

Georgia turns the same logic into a deadline. Ga. Code 43-40-20(a) says a broker who does not accept trust funds is not required to maintain an account, "provided, however, that if a broker does not maintain such a trust or escrow account and later receives trust funds in a real estate brokerage transaction, such broker must open the designated trust or escrow account required by this subsection within one business day of the receipt of such trust funds." One business day, from a standing start, to open a bank account.

Who is allowed to hold the money

More states than you would guess let somebody else hold it, and two of them write the alternative directly into the rule.

New Mexico names title companies in the rule itself. 16.61.23 NMAC, effective 1 January 2012, requires a qualifying broker who receives money belonging to others to "deposit same only in a trust account in an acceptable financial institution, title company or with a qualifying broker also involved in the transaction," and then says outright: "In lieu of a brokerage trust account, a broker may deposit funds with a title company authorized to do business in the state of New Mexico."

Texas does the same thing, and I had this backwards. I assumed going in that Texas imposed no broker trust account duty because earnest money customarily sits with a title company. That is wrong. 22 TAC 535.146(b)(1) states that "any trust money accepted by a broker is held in a fiduciary capacity and must be maintained in a designated trust account maintained by the broker or delivered to an escrow agent authorized in Texas in accordance with the agreement of the principals of the transaction." The duty is real. The title company route is one of two lawful ways to discharge it, not an absence of obligation.

Texas also draws a line nobody should cross by accident. 535.146(b)(2): "A sales agent shall not maintain a trust account. Any trust money received by a sales agent must be immediately delivered to the sales agent's sponsoring broker."

One more Texas trap. The Occupations Code contains something called the Real Estate Recovery Trust Account. That is a state-run consumer reimbursement fund financed by license charges. It has nothing to do with your brokerage's escrow account, and the shared words in the name have misled people.

Florida takes the widest view of acceptable depositories. Rule 61J2-14.010(1) permits "a bank, savings and loan association, trust company, credit union or title company having trust powers," and adds that "the broker must be a signatory on all escrow accounts."

The deadline, which is where states diverge most

Same act, same money, and the answer ranges from one banking day to nothing at all.

Three things in that table deserve more than a row.

Florida says "immediately" and does not mean it. Rule 61J2-14.010, the rule a broker would naturally read, requires you to "immediately place the same" in an escrow account. The definition lives in a different rule entirely. 61J2-14.008(3): "'Immediately' means the placement of a deposit in an escrow account no later than the end of the third business day following receipt of the item to be deposited." Read the operative rule alone and you would think you had until close of business. You have three days. Read only a summary and you may get told the definition sits in the statute, which it does not.

Ohio appears to have no deposit deadline at all. ORC 4735.24, "Earnest money to be maintained in special account," was amended by Senate Bill 155 of the 136th General Assembly with an effective date of 2 March 2026, so it is current law as freshly revised. It governs what happens after the money is in the account, not how fast it gets there. It requires the broker to hold the money "in accordance with the terms of the purchase agreement" until one of five disbursement triggers occurs, and it caps how long a disputed deposit may sit: "not later than the first day of September following the two year anniversary date of the deposit of the earnest money in the broker's account, the broker shall return the earnest money to the purchaser." Neither that section nor 4735.18 states a number of days for the inbound deposit. If you practice in Ohio, do not read that as permission. Read it as the reason your own written procedure has to supply the deadline the statute does not.

Pennsylvania's statute and its regulation are worded differently. The statute says "by the end of the business day following their receipt by the broker." 49 Pa. Code 35.324(a) says "by the end of the next business day following its receipt in the real estate office where the escrow records are maintained." Those probably mean the same thing. They are not the same words, and the regulation adds a location element the statute does not have.

Interest, and the two states where your buyer funds affordable housing

This is the section with the genuine contradiction.

Ohio forbids it. ORC 4735.18(A)(26) makes it a disciplinable failure not to maintain a trust account, and specifies: "The account shall be noninterest-bearing, separate and distinct from any personal or other account of the broker." Ohio treats interest on a sales escrow account as something to be avoided entirely. Its property management accounts are the exception, under (A)(27): "This account may earn interest, which shall be paid to the property owners on a pro rata basis."

Washington requires it, and takes the money. RCW 18.85.285(8), as amended by 2023 c 470, requires a firm holding earnest money or client funds to maintain "a pooled interest-bearing trust account," and the interest, net of reasonable institution service charges, "shall be paid to the state treasurer for deposit in the Washington housing trust fund created in RCW 43.185A.130 and the real estate education program account created in RCW 18.85.321."

Read that twice if you are used to thinking of escrow interest as a rounding error. In Washington, by statute, the interest earned on your buyer's earnest money funds affordable housing and the state's own real estate education program. The broker never sees it, and neither does the buyer, unless the client elects a segregated account.

Connecticut runs a comparable program. Conn. Gen. Stat. 8-265f requires brokers holding an escrow account under 20-324k to participate, with the interest paid to the Connecticut Housing Finance Authority for mortgage assistance. I was not able to open the General Assembly's own host to verify that text myself, so treat the Connecticut detail as sourced to research rather than to a page I read, and confirm it before relying on it.

Everywhere else, interest is permitted only by agreement, and the recipient is set by that agreement rather than by rule:

• California: Bus. & Prof. Code 10145(d)(5) says interest "shall not inure directly or indirectly to the benefit of the broker or a person licensed to the broker."
• New York: 19 NYCRR 175.1 says accrued interest "shall not be retained by, or for the benefit of, the broker except to the extent that it is applied to, and deducted from, earned commission, with the consent of all parties."
• Pennsylvania: 49 Pa. Code 35.325(c) encourages an interest-bearing account where money will be held more than six months, and states flatly that "a broker may not claim the interest earned on an escrow account."
• North Carolina: 21 NCAC 58A .0116(c) requires written authorization from all interested parties before depositing into an interest-bearing account, specifying "in a conspicuous manner how and to whom the interest shall be disbursed."
• Texas: 22 TAC 535.146(c)(3) sends interest to the parties the money is disbursed to, "unless otherwise provided for by an agreement signed by the party depositing the money."
• Arizona: A.R.S. 32-2151(C)(1) treats "failing to remove any interest that is earned on a trust fund account at least once every twelve months" as a violation in itself.

So there are four distinct models in one country: interest forbidden, interest compelled and diverted to the state, interest allowed by unanimous written agreement, and interest allowed but which the broker may never keep.

How much of your own money can sit in there

This is the rule most likely to catch an honest broker, because leaving your own money in a trust account is commingling unless a rule says otherwise, and the permitted amount is not close to consistent.

North Carolina allows one hundred dollars. Arizona allows five thousand. That is a fifty-fold difference in what the identical act of covering a bank charge is permitted to look like, and the consequence for exceeding it is the same word in both states: commingling.

California is the one to read closely, because it has two limits and most summaries mention only the first. 10 CCR 2835 caps service-charge funds at "not to exceed $200," and separately requires that broker-owned funds be "disbursed from the account not later than 25 days after their deposit." A broker who watches only the dollar figure can still breach the clock.

When the parties fight over the deposit

Florida has the most formal procedure in the set, and it comes with a safe harbour worth knowing.

Under Fla. Stat. 475.25(1)(d)1., a licensee holding escrowed property who "in good faith, entertains doubt as to what person is entitled" to it, or who faces conflicting demands, must promptly notify the commission and then pursue one of four routes: request an escrow disbursement order from the commission, submit to arbitration with the consent of all parties, seek adjudication by interpleader or otherwise, or with written consent submit to mediation, which "must be successfully completed within 90 days following the last demand." The payoff for doing this properly: "if the licensee promptly employs one of the escape procedures contained herein and abides by the order or judgment resulting therefrom, no administrative complaint may be filed against the licensee for failure to account for, deliver, or maintain the escrowed property."

Other states are simpler and give you less cover. Pennsylvania's 49 Pa. Code 35.327 has the broker retain the money until the dispute is resolved. Nebraska requires the broker to hold it "until he or she has a written release from all parties consenting to its disposition or until a civil action is filed." Ohio, as noted, sets an outer limit and then sends the money back to the purchaser.

What happens when it goes wrong

License discipline, and it reaches revocation for conduct that was not theft.

A Florida Real Estate Commission disciplinary report records a broker found to have violated the escrow provisions for failing to account for or deliver a client's earnest money deposit, resolved by a "settlement agreement to voluntarily relinquish license for permanent revocation" with costs. An earlier Florida report records a sales associate who "failed to immediately deposit Buyer's check into an escrow or trust account," penalty "revoked effective 3/2/11, fined $1000, costs."

A California Department of Real Estate decision confirms the point that repayment does not save you. The department "confirmed a trust fund shortage of $90,421.79. Funds in that amount were promptly placed in the trust account to address the issue and eliminate the shortage." The licenses were revoked anyway.

One honest gap. We wanted to tell you what share of license discipline trust account violations actually cause. California's Department of Real Estate does publish audit data in its own bulletin, and we could not open the file to read the figures ourselves, so we are not printing numbers from it. We also could not confirm that any commission publishes a clean breakdown of suspensions and revocations by cause. Treat the two cases above as illustrations, not as a measured rate.

What to actually do

Find your own state's rule before you take a deposit, and read the definitions rule too. Florida's operative rule says "immediately" and a different rule defines that as three business days. A summary that skips the definitions rule will give you the wrong deadline.

Read the statute and the commission's rules, not one or the other. In most states the duty is in the statute and the mechanics are in the rules, and in Pennsylvania the two are worded differently for the same deadline.

Decide who holds the money before the contract is written, not after. Texas, New Mexico and Colorado all let a title company or another named holder take it, and in Washington the contract instructing delivery to a named closing agent is what removes your account obligation entirely.

Assume your account must be non-interest-bearing until your rule says otherwise. Ohio requires it. Washington requires the opposite. Most states permit interest only with everyone's written agreement, and several forbid you from keeping it under any circumstances.

Learn your state's cushion figure as a number, not a feeling. One hundred dollars in North Carolina, two hundred in California with a 25 day clock attached, five thousand in Arizona. Exceeding it is commingling.

Reconcile monthly and keep the records for as long as your state says. Texas requires four years, Arizona five, New Mexico six. Arizona wants a three-way reconciliation between the bank statement, the client ledgers and the account ledger every month, with a written explanation for any variation.

Get this in front of a lawyer in your state before you open the account. Everything above is quoted from primary sources, and none of it is advice about your situation. This is the area of brokerage compliance where an honest mistake and a disciplinable offence look identical from the outside.

We build the websites new brokerages open with, and that work runs alongside decisions like this one rather than replacing them. If you are setting up and want the public-facing side handled properly, tell us what you are opening. For what the state requires on the site itself, we have advertising rules for fourteen states, plus what the law says about needing a physical office and carrying E&O insurance.

The short version

Real estate broker trust account requirements vary so much that the only safe generalisation is that there is no generalisation.

Most states require the account only if you hold money belonging to others. South Dakota does not require it at all. Georgia gives you one business day to open one once you first receive trust funds.

The deposit deadline runs from the next banking day in Washington, through the second working day in Texas and three days in California, New York, Colorado, Connecticut, North Carolina and Florida, to no stated deadline anywhere in Ohio's statutes.

Ohio's statute says the account shall be noninterest-bearing. Washington's requires an interest-bearing pooled account and pays the interest to the state treasurer for the housing trust fund and the real estate education program. Those two states cannot both be describing best practice.

Your own money in the account is capped at one hundred dollars in North Carolina and five thousand in Arizona, with California adding a 25 day clock on top of its two hundred.

And the penalty for getting it wrong is not a warning. Florida has permanently revoked a license over a deposit that was not accounted for, and California revoked over a shortage that had already been repaid.