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Brokerage Standards Manual

XI. Appendix

Strata Management Examples

GHI Strata Management Inc. manages three strata corporations. GHI maintains an operating trust account and a contingency reserve trust account for each strata corporation. Strata fees, which include a contribution to the contingency reserve fund, are collected at the beginning of each month.

The strata management fee charged is based upon a monthly fee and established by the approved annual budget for the strata corporation.

Exhibit XIII

Trust Funds Received and Disbursed

TRUST FUNDS RECEIVED

Section 7-9(2) of Rules describes requirements where a brokerage holds or receives money on behalf of a strata corporation.

Strata Corp Operating Account Reference

Strata Unit

Description

Date Deposit Received

Date Deposited to Bank

Receipt
(Pre-
numbered)

Amount

# LMS1

123

Strata Fee receipt

January 1, 2008

January 2, 2008

# 1

$ 500.00

# LMS1

456

Strata Fee receipt

January 1, 2008

January 2, 2008

# 2

$ 550.00

In accordance with section 27 of RESA, GHI Strata Management Inc. has ensured that all the trust funds received were deposited promptly into an operating trust account maintained in trust by the brokerage on behalf of the strata corporation. Please note the date the trust funds were received and the date the trust funds were deposited to the bank. The brokerage is required to deposit trust funds “promptly” upon receipt.

To assist their accountant in preparing the annual Accountant’s Report, GHI Strata Management Inc. has recorded references, such as the strata lot number or strata unit address, on the deposit slip and clearly indicated whether the strata fee payment was paid by cash, cheque, or electronic deposit.

As there are no provisions in RESA which permit a brokerage to maintain non-trust funds in a trust account, GHI Strata Management Inc. has ensured that it did not deposit non-trust funds or maintain a cash float in the trust account.

Electronic Deposits

Section 2.1 of the Rules requires that if a brokerage receives money by way of electronic funds deposit (EFT) into a brokerage trust account that receives funds on behalf of more than one strata corporation, the money must be transferred to the applicable trust account no later than three days after the day on which it was received.

Strata Corp EFT Account Reference

Strata Unit

Description

Date Deposit Received

Date trf to Strata Operating Account

Receipt
Ref

Deposit Amount

Transfer Amount

# LMS1

 

Jan Strata Fee receipts

January 2, 2008

 

EFT1

$ 1,875.00

 

# LMS1

506

Strata Fee receipt

 

January 5, 2008

www74

 

$ 575.00

# LMS1

1112

Strata Fee receipt

 

January 5, 2008

www849

 

$ 600.00

# LMS1

5556

Strata Fee receipt

 

January 5, 2008

www613

 

$ 700.00

Other Remuneration – i.e.: Forms B & F Fees from a Person other than the Principal

Section 5-15.1 of the Rules identifies some remuneration that is not required to be paid into the brokerage trust account, such as the fees for the completion of Forms B & F where authorized by the service agreements and the remuneration has been earned.

TRUST FUNDS DISBURSED

Strata Corporation Account Reference

Description

Date Funds Disbursed

Date Cleared Bank

Cheque # Ref

Amount

# LMS1

Hydro Utility payment

January 10, 2008

January 16, 2008

# 101

$ 100.00

# LMS1

Strata Management fee

January 15, 2008

January 20, 2008

# 102

$ 126.00

# LMS1

Trf to CRF – Jan

January 31, 2008

February 3, 2008

Trf 123

$ 50.00

Trust Funds Transferred to Contingency Reserve

Section 7-9(3) of the Rules requires that for amounts received that include contingency reserve fund money or special levy money or both, it must be paid into an applicable trust account or to the strata corporation. Additionally, section 7-9(4) of the Rules requires that, if applicable, within seven days after the end of the month in which the contingency reserve fund or special levy money is received, the brokerage must either pay the money over to the strata corporation or transfer it to an applicable trust account.

Strata Corporation Account Reference

Description

Date Funds Transferred

Date Cleared Bank

Trf Ref #

Amount

# LMS1-CRF

Trf from Operating – Jan

Jan 31, 2008

Feb 3, 2008

Trf 123

$ 50.00

Trust Funds Transferred to a Pooled Trust Account for Payments on Behalf of More than One Strata Corporation

Section 7-9(5) of the Rules requires that if money is transferred to a pooled trust account for one or more strata corporations, the brokerage must promptly pay the money on behalf of the strata corporation.

EXHIBIT XIV

TRUST JOURNAL

The trust journal records all receipts and all disbursements with reference to the strata corporation number, a description of the transaction, the receipt or cheque number, the amount of the receipt or disbursement and a running balance of the designated strata trust account.

LMS1

Description

Operating

Strata Unit

Date

Amount
Received

Receipt Ref

Amount
of Disb.

Chk #

Trust
Balance

Balance Fwd.

           

NIL

Strata Fee Receipt

# 123

January 1, 2008

$ 500.00

 

-

-

$ 500.00

Strata Fee Receipt

# 456

January 2, 2008

$ 550.00

 

-

-

$ 1,050.00

Strata Fee Receipt

# 506

January 5, 2008

$ 575.00

 

-

-

$ 1,625.00

Strata Fee Receipt

# 1112

January 5, 2008

$ 600.00

 

-

-

$ 2,225.00

Strata Fee Receipt

# 5556

January 5, 2008

$ 700.00

 

-

-

$ 2,925.00

Hydro Utility Payment

Jan

January 10, 2008

-

-

$ 100.00

101

$ 2,825.00

Strata Management Fee Charged

Jan

January 15, 2008

-

-

$ 126.00

102

$ 2,699.00

Trf to CRF

Jan

January 31, 2008

   

$ 50.00

Trf123

$ 2,649.00

Description

LMS1-CRF

Strata Unit

Date

Amount
Received

Receipt Ref

Amount
of Disb.

Chk #

Trust
Balance

Balance Fwd.

           

$ 10,000.00

Jan trf from Operating

   

$ 50.00

Trf 123

   

$ 10,050.00

LMS1-CRF

GHI Strata Management Inc. has ensured that trust funds received and disbursed (see Exhibit XIII) were recorded in the trust journal on a daily basis. GHI Strata Management Inc. has also ensured that the general accounts were updated on a weekly basis.

To assist their accountant in preparing the annual Accountant’s Report, GHI Strata Management Inc. has recorded references on the cheque and the receipt, such as the strata corporation and strata unit reference and invoice # for supplier.

EXHIBIT XV

STRATA MANAGEMENT BANK STATEMENT

This is a sample of a trust bank statement that would be received by the brokerage from the bank each month for each trust account held for the brokerage.

Bank of British Columbia 
Account # 2468 
Bank Statement as at January 31, 2008

 

GHI Strata Management Inc.
In Trust For LMS1-Operating

Date

Description

Amounts debited from your account ($)

Amounts credited to your account ($)

Balance($)

Business Current Account #2468

Account type: OPERATING STRATA TRUST

Business name:

GHI Strata Management Inc. In Trust For LMS1-Operating

         

January 1, 2008

Opening balance

   

0.00

Jan 2

Deposit

$ 500.00

-

$ 500.00

Jan 2

Deposit

$ 550.00

-

$ 1,050.00

Jan 5

www74

$ 575.00

 

$ 1,625.00

Jan 5

www849

$ 600.00

-

$ 2,225.00

Jan 5

www613

$ 700.00

 

$ 2,925.00

Jan 16

Cheque, NO. 101

 

$ 100.00

$ 2,825.00

Jan 20

Cheque, NO. 102

 

$ 126.00

$ 2,699.00

January 31

Closing totals

$ 2,925.00

$
226.00

$
2,699.00

           

Bank of British Columbia 
Account # 2468 -1
Bank Statement as at January 31, 2008

 

GHI Strata Management Inc.
In Trust For LMS1-CRF

Date

Description

Amounts debited from your account
($)

Amounts credited to your account
($)

Balance($)

Business Current Account #2468-1

Account type; OPERATING STRATA TRUST

Business name:

GHI Strata Management Inc. In Trust For LMS1-CRF

         

January 1, 2008

Opening balance

   

$ 10,000.00

January 31

Closing totals

nil

nil

$ 10,000.00

               

GHI Strata Management Inc. has reviewed the strata property management trust bank statement to ensure that the information displayed is accurate (agrees to all bank deposit slips and cancelled cheques).

EXHIBIT XVI

STRATA PROPERTY MANAGEMENT

TRUST BANK RECONCILIATION

GHI Strata Management Inc has ensured that the monthly trust bank reconciliation(s) were prepared by the 15th of the following month or immediately upon receipt of the trust bank statement(s).

LMS1-Operating

Balance Per Bank Statement as at January 31, 2008
(This balance is taken from the bank statement shown above.)

$ 2,699.00

Add: Outstanding Deposits & Transfers
(Note: Deposits and transfers instructed before the end of the month per the Trust Journal but which are not yet shown on the bank statement should be entered here.)

0

Subtotal

$ 2,699.00

Less: Outstanding Cheques & Transfers
(Note: Cheques and transfers issued before the end of the month per the Trust Journal but which have not yet cleared the account should be entered here.)

 

Cheque/Transfer Ref #

Date

Amount

 

Jan CRF

January 31, 2008

$ 50.00

 
     

$ 50.00

Adjusted Balance Per Bank as at January 31, 2008 
(This amount should agree with the balance on the trust journal [Exhibit XIV] and the trust liability reconciliation [Exhibit XVII] at the end of the month)

$ 2,649.00

 

LMS1-CRF

Balance Per Bank Statement as at January 31, 2008
(This balance is taken from the bank statement shown above page.)

$ 10,000.00

Add: Outstanding Deposits & Transfers
(Note: Deposits and transfers instructed before the end of the month per the Trust Journal but which are not yet shown on the bank statement should be entered here.)

$ 50.00

Subtotal

$ 50.00

Less: Outstanding Cheques & Transfers 
(Note: Cheques and transfers issued before the end of the month per the Trust Journal but which have not yet cleared the account should be entered here.)

0

Cheque/Transfer Ref #

Date

Amount

 
   

nil

 
     

$ 0

Adjusted Balance Per Bank as at January 31, 2008 
(This amount should agree with the balance on the trust journal [Exhibit XIV] and the trust liability reconciliation [Exhibit XVII] at the end of the month)

$ 10,050.00

 

EXHIBIT XVII

STRATA PROPERTY MANAGEMENT

TRUST LIABILITY RECONCILIATION

The trust liability reconciliation is a summary of each individual outstanding client ledger (per Exhibit XV).

GHI Strata Management Inc. has ensured that the monthly trust liability reconciliation(s) were prepared no later than five weeks after the monthly accounting cut-off date for the accounts or immediately on receipt of the trust bank statement(s).

GHI Strata Management Inc. has also ensured that the total trust funds in the trust liability reconciliation(s) agree to the adjusted bank balance (see Exhibit XVI).

Strata Property Ref #

Trust Funds

LMS1

$ 2,649.00

LMS1-CRF

$ 10,050.00

   

Total

$ 12,699.00