(A) All brokerages engaging in the management
of property for another shall establish and maintain a separate trust
account(s), to be designated as property management trust account(s), for the
deposit of security deposits, rents, and money received from the owner(s) or on
the owner's(s') behalf for payment of expenses related to the management of
property. Before making disbursements from a property management trust account,
the real estate
license
licensee shall ensure that the account balance for
that owner's(s') property(ies) is sufficient to cover the
disbursements.
(B)
(1) A property management trust account
established by a broker may earn interest.
Except as provided in paragraph (B)(2) of this rule, the
interest earned shall be payable on a pro rata basis to the owner(s) of the
property(ies) on whose behalf monies are deposited in the property management
trust account. The interest shall be paid or credited on a regular basis, but
in no event later than on a quarterly basis.
(2) The property owner(s) and broker may
agree that the interest due the owner(s) under this rule will be paid in a
manner other than specified in this rule and to a party(ies) other than the
owner(s). Any such agreement must be specified in writing, signed by the
owner(s) and the broker or an authorized agent of the broker.
(3) Nothing in this rule shall be construed
to require that a broker's property management trust account earn
interest.
(C) A separate
ledger sheet shall be maintained for each owner of property managed by the
brokerage identifying the following information
in
columnar form:
(1) Name and/or
address of the property;
(2)
Parties to the transaction;
(3)
Amount, date, and purpose of deposit(s);
(4) Party from whom deposits are
received;
(4)
Method of receipt including:
(a)
Cash and
associated receipt number;
(b)
Negotiable
instrument number;
(d)
Electronic funds
transfer number;
(e)
Funds transfer number;
(f)
Automated
clearing house (ACH) number;
(g)
Credit or debit
card transaction number.
(5) Amount, date, check number, and
purpose of disbursements;
(5)
Party from whom
deposits are received;
(6)
Party to whom disbursements are made;
(7) Running balance of funds on
deposit for the particular owner of property;
(7)
Method of
disbursement including:
(a)
Cash and associated receipt number;
(b)
Negotiable
instrument number;
(d)
Electronic funds
transfer number;
(e)
Funds transfer number;
(f)
Automated
clearing house (ACH) number;
(g)
Credit or debit
card transaction number.
(8) Amount of interest earned on
behalf of the owner(s) of the property(ies) if any.
(8)
Amount of disbursement, party, and if applicable, account to whom funds are
disbursed and purpose of disbursement;
(9)
Running balance
of funds on deposit for the particular owner of property;
(10)
Amount of
interest earned on behalf of the owner(s) of the property(ies), if
any.
(D) Security
deposits received by a licensee must be deposited and maintained in the
property management trust account unless the lease and property management
agreement provide otherwise. Security deposits maintained in the property
management trust account must be clearly identified and credited to the
tenant.
(E) All brokerages who
engage in property management activities shall provide an accounting to each
owner of property managed on a regular basis, but in no event not less than on
a quarterly basis.
(F) Any real
estate licensee who fails to comply with the provisions of this rule may be
deemed to be in violation of divisions (A)(5), (A)(6), and/or (A)(27) of
section 4735.18 of the Revised
Code.
(G) Division (A)(26) of
section 4735.18 of the Revised Code does
not apply to brokers who are engaged only in property management and who
maintain a property management trust account, as required division (A)(27) of
section 4735.18 of the Revised
Code.
(H) Division (A)(27) of
section
4735.18 of the Revised Code does
not apply to brokers:
(1) That do not collect
any rents, security deposits, escrow funds, or other money received in a
fiduciary capacity in the course of managing real property; or
(2) That only collect but do not retain
security deposits, first or last month's rent, or other money and do not
collect any other monthly rent or money and have no other duties on behalf of
the owner following the execution of a lease; or
(3) That only maintain property management
accounts in the name of the owner pursuant to rule
1301:5-5-23
of the Administrative Code.