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Brokerage Standards Manual

Notice of Change: Information in this manual changed when new agency and disclosure rules came into effect on June 15, 2018. Learn more about the new rules.Notice of Change: Information in this manual changed when new agency and disclosure rules came into effect on June 15, 2018. Learn more about the new rules.

Managing Broker Duties

7. Accounts And Records

Section 3-1 of the Rules provides that the managing broker is responsible to ensure that the trust accounts and records of the brokerage are maintained in accordance with RESA, the Regulation, Rules and Bylaws and that there is appropriate management and control of documents related to the licensing requirements.

A managing broker must be a signing authority on each trust account maintained by the brokerage. Additionally, a managing broker, or someone designated by the managing broker, must review, date, and initial the monthly trust asset and liability reconciliations.

RECBC would expect to find that the managing broker has reviewed and ensured the following is in place in the books and records of the brokerage:

  • a paper trail system implemented, with every trade in real estate, rental property management, and strata management file being reviewed by the managing broker, including deposits, expenditures, trade record sheets, service agreements and sales contracts, and any correspondence on the brokerage’s letterhead;
  • rental property management files containing copies of tenancy agreements, financial statements sent to owners, accounting statements and invoices for expenditures that are provided to the client, written service agreements, and a record of all security, pet and other deposits paid by each tenant;
  • strata management files containing copies of the written service agreement, financial statements, accounting statements and invoices for expenditures, and monthly statements from financial institutions sent to the strata corporation;
  • the monthly trust asset and liability reconciliation for each trust account reviewed and initialed by the managing broker or someone designated by the managing broker;
  • monthly trust liability reconciliations are maintained listing every client or trade for which the brokerage holds trust funds, and the amount of funds being held for each client;
  • trust bank statements, cancelled cheques and deposit books properly designated as “trust”;
  • trust journal and ledger for each trust account;

The managing broker should also ensure that all accounting records are kept up-to-date, the managing broker is a required signatory on all trust accounts, and the Accountant’s Report and Brokerage Activity Report are completed and filed with the Real Estate Council by their due date.

RECBC recommends that when a managing broker transfers to a new brokerage, the managing broker reviews the brokerage’s books and records for previous years to ensure that the brokerage has been in compliance with the requirements of RESA and RECBC guidelines.

Establishing and maintaining the foregoing policies and procedures will assist managing brokers in meeting their obligations to be in active charge of the business of the brokerage.