Use six clocks and four record layers
Handle
Immediate salesperson delivery and the three-business-day rule
Record
Control, beneficiary, nondeposited, and property records
Reconcile
Monthly statutory comparison with a saved audit trail
California trust funds generally must reach the owner, a neutral escrow depository, or the broker's trust account no later than three business days after receipt by the broker or salesperson. Maintain the control and separate beneficiary records, reconcile them at least monthly when the account has activity, and retain transaction records for three years.
DRE, 2026 Regulations 2831 through 2835The complete exam-focused deadline table
| Trigger | Deadline | Required next state |
|---|---|---|
| Salesperson receives trust value | Immediately | Deliver to the responsible broker or follow the broker's direction to a lawful recipient or depository |
| Ordinary broker handling | No later than 3 business days after receipt by broker or salesperson | Owner, neutral escrow depository, or properly designated broker trust account |
| Offeror check validly held until acceptance | No later than 3 business days after acceptance | Escrow, trust account, or offeree when both parties expressly direct in writing, unless offeree authorizes continued holding |
| Statutory record reconciliation | At least once a month | Reconcile all separate beneficiary or transaction balances to the control record, except a month with no bank-account activity |
| Undisputed broker share in inseparable receipt | No later than 25 days after deposit | Remove the broker-owned portion from trust |
| Transaction records | 3 years | Run from closing, or from the listing date when the transaction is not consummated |
Identify the broker's role before counting
For the ordinary three-business-day rule, a Friday receipt is ordinarily due by Wednesday when no holiday intervenes. Count business days after the triggering receipt or acceptance. A broker acting as escrow holder under Regulation 2832(e) instead has a next-business-day deadline. That narrower exception does not replace the ordinary brokerage rule.
A held offer check uses two different states
| State | Conditions | Clock |
|---|---|---|
| Before acceptance | Check is not negotiable by broker or offeror gave written no-deposit instruction, and offeree is informed before or when offer is presented | May remain uncashed until acceptance |
| After acceptance | No written offeree authorization to continue holding | Place in a lawful destination no later than three business days after acceptance |
| Continued holding | Broker receives written authorization from the offeree | Follow the written authority and preserve the nondeposited-funds record |
Use the record that matches the path of the funds
| DRE sample | Record job | Key relationship |
|---|---|---|
| RE 4522 | All trust funds deposited to and paid from one trust bank account | Control balance must support tracing and reconciliation |
| RE 4523 | Separate record for each beneficiary or transaction in the account | Sum of separate liabilities must agree with the control record |
| RE 4524 | Trust value not placed in the broker's trust account, including uncashed checks, notes, and other deposits | Tracks receipt and disposition outside the account |
| RE 4525 | Separate receipts and disbursements for each property managed for others | Used instead of RE 4523 for the same property-management transactions |
DRE permits a broker to design another compliant system. The forms are models, not mandatory software. The substitute still needs the columnar information required by Regulations 2831 and 2831.1 and a format that readily enables tracing and reconciliation.
DRE, RE 4521 trust-fund recordkeeping packetKnow what each statutory record must show
Regulation 2831 control record
Chronological receipt date, source, amount, deposit date, related disbursement check number and date, other depository and forwarding date when not deposited, and the account's daily balance.
Regulation 2831.1 separate record
Transaction and party identification, deposit date and amount, each disbursement date, check number and amount, applicable interest entries, and the beneficiary balance after posting.
Daily entry is DRE operational guidance
DRE's Professional Responsibility booklet recommends recording transactions daily and calculating balances when entries are made. The regulations require chronological records and daily or post-transaction balances. State the source correctly instead of inventing a separate universal midnight filing deadline.
Reconciliation has a statutory comparison and a bank-control comparison
| Comparison | Status | Purpose |
|---|---|---|
| Control record versus all separate beneficiary or transaction records | Regulation 2831.2, at least monthly except no-activity months | Proves recorded aggregate liability agrees with the account control record |
| Control record versus adjusted bank statement | DRE-recommended accounting control, described as not itself required by the Real Estate Law or regulations | Finds bank or broker recording differences, deposits in transit, and outstanding checks |
The saved statutory reconciliation must identify the bank account name and number, reconciliation date, principals, beneficiaries, or transactions, and the broker's trust-fund liability to each. “I checked the balance” is not the required record.
DRE, monthly trust-record and bank-statement reconciliation guidanceStart the three-year retention clock from the correct event
Transaction closes
Retain listings, deposit receipts, canceled checks, trust records, and connected transaction documents for three years from closing.
Transaction does not close
The three-year period runs from the listing date when the transaction is not consummated.
Use a six-step monthly close
- 01Post every receipt and disbursement to the correct control and separate record
- 02Confirm each beneficiary balance and investigate any negative balance
- 03Add all beneficiary or transaction liabilities for the account
- 04Compare that sum with the Regulation 2831 control-record balance
- 05Compare the control record with the adjusted bank statement as a separate control
- 06Resolve differences and save the dated reconciliation with every required identifier
Eight deadline and record mistakes
Applying the broker-escrow next-business-day exception to an ordinary brokerage receipt
Restarting the clock when the salesperson later hands the funds to the broker
Holding a check after acceptance without the required written authority
Recording only bank deposits and omitting uncashed checks or other value
Keeping one total ledger without separate beneficiary records
Calling a bank-statement reconciliation the complete statutory reconciliation
Skipping reconciliation in an active month because the bank balance looks right
Starting three-year retention from the wrong transaction event
Keep the timeline beside the compliance checklist
Trace receipt through retention
Use the trust-account checklist to test lawful destination, clock, record layer, beneficiary liability, reconciliation, withdrawal authority, and retention in one sequence.
Frequently asked questions
How soon must California trust funds be deposited?
Unless a valid held-check rule applies, the broker must place trust funds into the owner's hands, a neutral escrow depository, or the properly designated broker trust account no later than three business days after receipt by the broker or salesperson. The salesperson's receipt starts the clock.
Is the California trust fund deadline the next business day?
Ordinary brokerage receipts follow the three-business-day rule. A Friday receipt is ordinarily due by Wednesday when no holiday intervenes. Regulation 2832(e) has a separate next-business-day rule when the broker acts as escrow holder. Identify the role before choosing the deadline.
How long may a broker hold a buyer's check uncashed?
Before acceptance, the check may be held when it is not negotiable by the broker or the offeror gives written no-deposit instructions and the offeree is informed. After acceptance, it must reach a lawful destination within three business days unless the offeree gives written authority to continue holding it.
What trust account records must a California broker keep?
Regulation 2831 requires a chronological control record for all trust funds received and disbursed. Regulation 2831.1 requires a separate record for each beneficiary or transaction whose funds enter the trust account. Nondeposited value and managed-property transactions also need traceable records.
What are RE 4522, RE 4523, RE 4524, and RE 4525?
They are DRE sample record forms: RE 4522 is the trust-account control record, RE 4523 is each beneficiary or transaction record, RE 4524 tracks trust value not deposited to the broker's account, and RE 4525 tracks each managed property. Another compliant system may be used if it contains the required information.
How often must a California trust account be reconciled?
Regulation 2831.2 requires the sum of separate beneficiary or transaction records to be reconciled with the control record at least once a month, except a month when the bank account had no activity. A dated record with the required account and liability details must be maintained.
Is reconciling the trust ledger to the bank statement required?
DRE strongly recommends a monthly comparison of the control record with the adjusted bank statement and calls it essential to good accounting. Its Professional Responsibility booklet also explains that this bank comparison is not itself required by the Real Estate Law or Commissioner's Regulations. The Regulation 2831.2 comparison is control record to separate records.
How long may earned broker funds remain in the trust account?
When one receipt belongs partly to the principal and partly to the broker and separation was not reasonably practicable, the undisputed broker portion must be disbursed no later than 25 days after deposit. A disputed broker portion remains until the dispute is finally settled.
How long must California real estate trust records be kept?
Business and Professions Code section 10148 requires three-year retention of listings, deposit receipts, canceled checks, trust records, and related transaction documents. The period runs from closing, or from the listing date if the transaction is not consummated.
Keep going
Apply every deadline inside the trust-account checklist
Continue with the related guide and practical next steps for this topic.
Classify the funds before starting a clock
Separate beneficial ownership, broker compensation, mixed receipts, and uncashed checks.
Identify the violation after tracing the account
Separate wrong-account mixing, unauthorized use, shortages, and Regulation 2835 exceptions.
Practice California trust-account timelines
Apply receipt, acceptance, deposit, record, reconciliation, and retention facts in fresh scenarios.