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Brokerage Standards Manual

IV. Accounting and Financial Records/Systems

General Recordkeeping Requirements

(a) General Record Requirements

In addition to the financial records, a brokerage is required by section 8-4 of the Rules to keep other records relating to the provision of real estate services. All brokerages must maintain the following records as applicable to the real estate services that the brokerage provides, including:

  • copies of all written disclosures;
  • copies of written service agreements and any other records that establish the scope of authority of the brokerage respecting the provision of real estate services to a client;
  • a copy of all annual financial reports;
  • a list, maintained separately for each fiscal year of the brokerage, of
  • all trades in real estate in which the brokerage is or was involved during that year;
  • all rental properties that are or were managed by the brokerage during that year; and
  • all strata corporations that are or were managed by the brokerage during that year.

Additional records, as described below, are required by the Rules to be maintained, depending on the type of real estate services that the brokerage provides.

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(b) Trading Services

Section 8-5 of the Rules requires that a brokerage providing trading services keeps copies of the following records:

  • the contracts for the acquisition or disposition of real estate;
  • any accounting statements prepared by or on behalf of the brokerage that are provided to a party by the brokerage in relation to the trade in real estate.

Additionally, section 8-5(2) of the Rules requires that in all cases where a brokerage or related licensee holds or receives money in relation to a trade in real estate, a Trade Record Sheet, in a form approved by the Council, be prepared and retained by the brokerage. This is a sample of an approved Trade Record Sheet, however, as long as all the information as set out in the form is recorded, it is not necessary to use the approved Trade Record Sheet. Where an approved Trade Record Sheet is not used, it is important to note that all the information that is contained on that form must be set out in one document. The requirement to prepare a Trade Record Sheet is not satisfied by collecting a number of documents together that contain some of the information required in a Trade Record Sheet.

The Trade Record Sheet must include the following information:

  • the nature of the trade in real estate;
  • a description sufficient to identify the real estate involved in the trade in real estate;
  • a deal number for the purposes of identifying the trade in real estate;
  • the sale price or other consideration for the trade in real estate;
  • the name and address of every party to the trade in real estate;
  • the amount of money received that is required by section 27 of RESA to be paid into the brokerage’s trust account and details of every disbursement of that money;
  • the amount of remuneration paid or payable to any licensee or other person, the name of the party paying the remuneration and the name of the person who has received or is to receive it.

The Trade Record Sheet is not a substitute for a separate trust ledger for each trade in real estate.

Trade Record Sheet is required in every case where a brokerage holds or receives money in relation to a trade in real estate and not just in relation to completed trades in real estate.

For lease trades in real estate, the record sheet should be modified to provide the name of the lessor and lessee, the terms of the lease, lease rate, and the various security, pet or other deposits.

Additionally, as set out under the heading “General Record Requirements”, a brokerage providing trading services must retain written disclosures, written service agreements, annual financial reports and a list of all trades in real estate in which the brokerage is or was involved during the year, maintained separately for each year.

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(c) Rental Property Management Services

In addition to the general record keeping requirements described above, section 8-6 of the Rules sets out the records that a brokerage that provides rental property management services must retain and also the specific documents that the brokerage must prepare.

Section 8-6(1) requires a brokerage to retain:

  • the tenancy agreements or other contracts for the rental of the real estate;
  • any accounting statements prepared by or on behalf of the brokerage that are provided to clients;
  • any invoices for expenditures incurred on behalf of clients.

Section 8-6(2) of the Rules requires that a brokerage providing rental property management services must prepare and retain a record of:

  • the tenants at each rental property managed by the brokerage; and
  • the security deposits, pet damage deposits and other deposits paid by each tenant.

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(d) Strata Management Services

In addition to the general record keeping requirements described above, a brokerage that provides strata management services is required by section 8-7.1  of the Rules to maintain separate books and records for each strata corporation on whose behalf the brokerage provides strata management services.

Section 8-7.1(2) of the Rules provides that a brokerage must retain the following records with respect to each strata corporation:

  • any accounting statements prepared by or on behalf of the brokerage that are provided to the strata corporation;
  • invoices for expenditures incurred on behalf of the strata corporation;
  • copies of the monthly statements from savings institutions that have been provided to the strata corporation and copies of the monthly reconciliation provided to the strata corporation in relation to those statements.

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(e) Provision Of Strata Corporation Bank Statements & Reconciliations

Section 7-9(7) of the Rules requires that for each trust account opened by a brokerage providing strata management services, the brokerage must arrange for the savings institution to provide monthly statements respecting the account to the brokerage. The Rules also require that the brokerage provides a copy of the statement to the strata corporation, no later than six weeks after the end of the month for which the statement was issued by the savings institution, along with a copy of the monthly reconciliation prepared by the brokerage for that account in relation to that statement.

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(f) Unclaimed Money

Occasionally, a brokerage may be unable to trace individuals whose money they hold in trust. Typically, the unclaimed amount will result from an accumulation of small deposits.

Section 32 of RESA permits a brokerage to transfer such money to the administrator appointed under the Unclaimed Property Act if the brokerage has made reasonable efforts to locate and notify the person entitled to claim the money and, despite these efforts, the money has remained unclaimed for more than one year.

A brokerage is not, however, required by RESA to pay the unclaimed money to the administrator appointed under the Unclaimed Property Act. If unclaimed monies are not paid under the Unclaimed Property Act, the monies must be kept in the brokerage’s trust account in perpetuity.

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