2007 - Broker Trust Accounts

County of Los Angeles
Department of Consumer Affairs
New Consumer Laws 2007

Broker Trust Accounts

Financial Code Sections 854.1, 854.2

The law authorizes real estate brokers to place funds in an interest bearing account, but provides that the broker may not keep the interest earned on the account. Thus, under current law, two commercial entities (an investor and a mortgage bank) may not negotiate to split the interest revenue.

The new statute authorizes commercial mortgage bankers licensed by the Department of Real Estate to deposit funds collected on behalf of an institutional investor in an interest bearing account, and to retain some or all of the interest earned on those funds, as negotiated and agreed between the mortgage banker and the institutional investor.

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For more information:
County of Los Angeles Department of Consumer Affairs
B-96 Kenneth Hahn Hall of Administration
500 W. Temple Street * Los Angeles, CA 90012-2706
Telephone (800) 593-8222 (within the County) * (213) 974-1452
web site: dca.lacounty.gov