Real estate trust account

A real estate trust account is a bank account in which a brokerage holds money that belongs to other people — most commonly buyers’ deposits, and in property management, tenants’ rents — strictly separated from the brokerage’s own operating funds. Trust obligations are among the most tightly policed rules in Canadian real estate: provincial regulators such as RECO in Ontario and BCFSA in BC set the record-keeping, reconciliation, and audit requirements, and trust violations are the kind of breach that ends brokerages.

How the protection works

Money in trust can only move on defined events: the deal closes and the funds flow through the transaction, the deal collapses and a mutual release directs the refund, or a court orders payment out. The brokerage cannot borrow against it, spend it, or mix it with its own money. Behind the account rules sit consumer-protection backstops — insurance and compensation arrangements that respond if trust money is misappropriated — which is why “who holds the deposit” is a question with a genuinely reassuring answer.

The practical edges

Deposits are payable to the brokerage “in trust,” usually the listing brokerage. Disputed deposits stay in trust until both parties sign a release or a court decides — neither side can simply demand the money. And an agent never takes a deposit personally: trust money goes to the brokerage’s trust account, promptly, with records. Any other arrangement is a red flag a client should hear about from you first.

Why it matters for your practice

Explaining trust accounts is how you answer the second-most-nervous question buyers have — “where does my money actually go?” — with structure instead of reassurance. It belongs beside your deposit explainer on any buyer-facing site.