1999 Minnesota Statutes

     82.24 Trust account requirements. 

    Subdivision 1.    Generally.  All trust funds received 
 by a broker or the broker's salespeople or closing agents shall 
 be deposited forthwith upon receipt in a trust account, 
 maintained by the broker for such purpose in a bank, savings 
 association, credit union, or an industrial loan and thrift 
 company with deposit liabilities designated by the broker or 
 closing agent, except as such money may be paid to one of the 
 parties pursuant to express written agreement between the 
 parties to a transaction.  The depository bank shall be a 
 Minnesota bank or trust company or any foreign bank and shall 
 authorize the commissioner to examine its records of such 
 deposits upon demand by the commissioner.  The industrial loan 
 and thrift company shall be organized under chapter 53.  The 
 savings association or credit union shall be organized under the 
 laws of any state or the United States. 

    Subd. 2.    Licensee acting as principal.  A licensee 
 acting in the capacity of principal in a real estate transaction 
 where the seller retains any liability, contingent or otherwise, 
 for the payment of an obligation on the property shall deposit 
 in a Minnesota bank or trust company, any foreign bank which 
 authorizes the commissioner to examine its records of the 
 deposits, a savings association, credit union, or an industrial 
 loan and thrift company organized under chapter 53 with deposit 
 liabilities, in a trust account, those parts of all payments 
 received on contracts that are necessary to meet any amounts 
 concurrently due and payable on any existing mortgages, 
 contracts for deed or other conveyancing instruments, and 
 reserve for taxes and insurance or any other encumbrance on the 
 receipts.  The deposits must be maintained until disbursement is 
 made under the terms of the encumbrance and proper accounting on 
 the property made to the parties entitled to an accounting.  The 
 provisions of this subdivision relating to rental of interests 
 in real estate apply only to residential property. 

    Subd. 3.    Nondepositable items.  Any instrument or 
 equity or thing of value received by a broker, salesperson, or 
 closing agent in lieu of cash as earnest money or down payment 
 in a real estate transaction shall be held by an authorized 
 escrow agent, whose authority is evidenced by a written 
 agreement executed by the offeror and the escrow agent.  

    Subd. 4.    Commingling funds.  A broker, salesperson, 
 or closing agent shall deposit only trust funds in a trust 
 account and shall not commingle personal funds or other funds in 
 a trust account, except that a broker, salesperson, or closing 
 agent may deposit and maintain a sum in a trust account from 
 personal funds, which sum shall be specifically identified and 
 used to pay service charges or satisfy the minimum balance 
 requirements relating to the trust account.  

    Subd. 5.    Trust accounts.  (a) Each broker or closing 
 agent shall maintain and retain records of all trust funds and 
 trust accounts.  The commissioner may prescribe information to 
 be included in the records by appropriate rules.  

    (b) A check received from a potential buyer shall be 
 deposited into the listing broker's trust account not later than 
 the third business day after delivery of the check to the 
 broker, except that the check may be held by the listing broker 
 until acceptance or rejection of the offer if: 

    (1) the check by its terms is not negotiable by the broker 
 or if the potential buyer has given written instructions that 
 the check shall not be deposited nor cashed until acceptance or 
 shall be immediately returned if the offer is rejected; and 

    (2) the potential seller is informed that the check is 
 being so held before or at the time the offer is presented to 
 that person for acceptance. 

    If the offer is accepted, the check shall be deposited in a 
 neutral escrow depository or the trust fund account of the 
 listing broker not later than the third business day following 
 acceptance of the offer unless the broker has received written 
 authorization from all parties to the transaction to continue to 
 hold the check.  If the offer is rejected, the check shall be 
 returned to the potential buyer not later than the next business 
 day after rejection. 

    Subd. 6.    Notice of trust account status.  The names 
 of the banks, savings associations, credit unions, and 
 industrial loan and thrift companies and the trust account 
 numbers used by a broker or closing agent shall be provided to 
 the commissioner at the time of application for the broker's or 
 closing agent's license.  The broker shall immediately report to 
 the commissioner any change of trust account status including 
 changes in banks, savings associations, credit unions, and 
 industrial loan and thrift companies, account numbers, or 
 additional accounts in the same or other banks, savings 
 associations, credit unions, and industrial loan and thrift 
 companies.  A broker or closing agent shall not close an 
 existing trust account without giving ten days' written notice 
 to the commissioner. 

    Subd. 7.    Interest bearing accounts.  Notwithstanding 
 the provisions of sections 82.17 to 82.31, a real estate broker 
 may establish and maintain interest bearing accounts for the 
 purpose of receiving deposits in accordance with the provisions 
 of section 504B.178.  

    Subd. 8.    Accrued interest.  (a) Each broker shall 
 maintain a pooled interest-bearing trust account for deposit of 
 client funds.  The interest accruing on the trust account, less 
 reasonable transaction costs, must be paid to the state 
 treasurer for deposit in the housing trust fund account created 
 under section 462A.201 unless otherwise specified pursuant to an 
 expressed written agreement between the parties to a transaction.

    (b) For an account created under paragraph (a), each broker 
 shall direct the financial institution to:  

    (1) pay the interest, less reasonable transaction costs, 
 computed in accordance with the financial institution's standard 
 accounting practice, at least quarterly, to the state treasurer; 
 and 

    (2) send a statement to the state treasurer showing the 
 name of the broker for whom the payment is made, the rate of 
 interest applied, the amount of service charges deducted, and 
 the account balance for the period in which the report is made. 

    The state treasurer shall credit the amount collected under 
 this subdivision to the housing trust fund account established 
 in section 462A.201. 

    HIST: 1973 c 410 s 8; 1975 c 38 s 5; 1984 c 473 s 8-10; 1985 c 
 248 s 70; 1985 c 251 s 10; 1986 c 358 s 12; 1986 c 444; 1Sp1986 
 c 3 art 2 s 48; 1987 c 105 s 4-6; 1987 c 336 s 24; 1988 c 654 s 
 2; 1989 c 347 s 25-30; 1993 c 309 s 15; 1994 c 461 s 2; 1995 c 
 202 art 1 s 25; 1997 c 222 s 36; 1999 c 199 art 2 s 2