Module 01 · Accounting & Trust

Trust Accounting for Property Managers

What a trust account is and why it exists, how it differs from your operating account, what commingling actually means and why it costs licenses, how reconciliation proves your books are right, what records you're required to keep, who is legally responsible when something goes wrong, and what your software does and doesn't handle for you.

6 min overview

Watch: trust compliance, state by state

Sections

Audit checks

Check questions

Checks reviewed

Why this module exists

Most trust accounting problems come from operators who grew fast and never rebuilt their systems to match their scale — not from intentional wrongdoing. This module is a structured pass over where that gap actually shows up: account structure, trust vs. operating funds, reconciliation, recordkeeping, broker liability, and your software's real limits. Each section ends with the audit checks a state examiner or a buyer's diligence team would run — worth confirming even if the concepts are familiar.

What's inside

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Where should you actually start?

Three quick questions — routes you to the section that matters most.

Do you know whether your trust account carries per-beneficiary FDIC coverage?

Have you run a full triple tie-out — bank, books, and individual ledgers — this month?

If your bookkeeper misconfigured trust software for two years, do you know exactly who's liable?

Or skip straight to the start.

Check your state

Cushion, retention, and rule figures this module covers.

What you'll take away

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One practical takeaway per section — what to actually change.

What a Trust Account Is, and Why It Exists

A "trust" label doesn't guarantee per-beneficiary FDIC coverage or seizure protection.

Confirm the bank actually structured it as a fiduciary account..

Trust Account vs. Operating Account

A fee doesn't become yours the moment rent lands.

It's commingling from the day it's earned until it clears your state's withdrawal window..

Commingling: What It Is, and Why It Gets Licenses Revoked

A trust-to-operating "loan" is misappropriation the moment it moves.

Intent to repay doesn't change the classification..

Reconciliation: How You Prove the Money Is Where It Belongs

Bank and books can tie out perfectly while individual ledgers are still wrong.

The third leg is where it actually hides..

Recordkeeping: What You Must Keep, and How Long

Multi-state retention defaults to the longest requirement in the mix, not the shortest.

Treat it as one company-wide floor..

The Broker's Role: Who Is Legally Responsible for Errors

Liability sits with the qualifying broker, full stop.

Delegating the work never delegates the exposure, in a sale or otherwise..

Your Tech Stack: What Software Does and Doesn't Handle

Misconfigured software still produces clean-looking reports.

A default setup from years ago is the most common hidden risk in an otherwise well-run shop..

The section on the bank-level fiduciary structure alone was worth it — we found out our "trust" account never actually had per-beneficiary FDIC coverage.

Placeholder operator · 340 doorsSample

Questions operators ask before starting

Does this apply if I already use property management software like AppFolio or Buildium?

What if my state isn't listed in the state tool?

We use a bookkeeper, not an in-house accountant. Does that change anything?

Is a small amount of company money in the trust account always a violation?

Do these rules change if I'm acquiring or being acquired?

Ready when you are.

Two minutes of reading, four audit checks to run against your own books.