Mont. Admin. r. 24.209.601

Current through Register Vol. 23, December 6, 2024

Rule 24.209.601 - TRUST ACCOUNTS

(1) Property managers who receive any deposits, rent payments, or other monies on behalf of other persons must deposit such funds in a trust account per 37-56-101, MCA, and maintain the account according to this rule.

(2) Trust accounts must be:

(a) liquid;

(b) readily accessible;

(c) insured in Montana financial institutions;

(d) identified as trust accounts; and

(e) reconciled each month having activity.

(3) Trust funds cannot be:

(a) maintained in sweep accounts; or

(b) invested in certificates of deposit, repurchase agreements, or any other method that places funds at risk.

(4) Property managers:

(a) may separately maintain multiple trust accounts;

(b) are responsible for all funds in and maintenance of their trust accounts;

(c) may delegate authority for trust account maintenance to another licensed property manager. Both property managers are responsible for failure to comply with trust account requirements; and

(d) must deposit monies belonging to others into a trust account within three business days, unless otherwise provided in the lease or rental agreement.

(5) Trust funds may be maintained in interest-bearing accounts with interest payable to the property manager or any other person. Interest payable to a property manager must be identified as consideration for services performed and are personal funds unless otherwise designated.

(6) Property managers may deposit and hold in a trust account up to $1000 of personal funds that include interest accrued to the property manager.

(a) Personal funds may be distributed for trust account bank charges, related trust account maintenance expenses, and when due and payable to the property manager.

(b) Money due the property manager must be withdrawn within ten business days once due and payable.

(7) When managing one's own real estate, property managers must deposit security deposits in a trust account. Rents and disbursements are managed as follows:

(a) Property managers owning 100 percent of the real estate are not required to place rents in a trust account but may do so.

(b) Property managers owning less than 100 percent of the real estate must place all rents in a trust account.

(c) If rents are included in a trust account, all disbursements must be described in the property management agreement.

(d) Disbursements may not be considered personal indebtedness if used for the maintenance of the property itself.

(8) Property managers must maintain complete and chronological records of all trust account funds received and disbursed including personal funds per (6). Each record must include a running balance and clearly identify for all transactions:

(a) dates;

(b) parties, payees, and sources of funds; and

(c) amounts received, disbursed, and deposited.

(9) When a property management agreement is terminated, a rental agreement is still in effect, and the property manager is holding tenant funds, the property manager must:

(a) notify the tenant, in writing and within five business days of termination that:

(i) the agreement is terminated; and

(ii) funds and current tenant files will be transferred to the property owner or designee within 30 days of the termination;

(b) provide the name and contact information of the person receiving the transfer; and

(c) within 30 days of termination, transfer all funds and current tenant files to the property owner or designee.

(10) Property managers must maintain the following documents for at least eight years from the property management agreement termination even if the property manager sells or ceases to operate the business:

(a) trust account records:

(b) complete files of properties managed; and

(c) all related documents.

(11) Trust account records must be maintained to facilitate auditing.

Mont. Admin. r. 24.209.601

NEW, 2023 MAR p. 1870, Eff. 12/23/2023

AUTH: 37-1-319, 37-56-102, MCA; IMP: 37-1-319, 37-56-106, MCA