Appendix

Published on 22 January, 2020

Mature woman standing and smiling with her team behind her.

Autrhorization Form — Interest to RealEstate Foundation

 

AUTHORIZATION FORM
 

TO: (Bank or Financial Institution)
 

RE: Real Estate Foundation of BC – Section 29 of the Real Estate Services Act

General Trust Account(s) Number
 

We hereby authorize you to pay interest on our brokerage’s general trust account(s) in accordance with the terms of the agreement between the (Bank, Savings Institution) and the Real Estate Foundation of BC. The interest earned on this account shall be held in trust for the Real Estate Foundation of BC pursuant to the Real Estate Services ActSection 29 and shall be paid directly to:

TO

FROM

Real Estate Foundation of BC
Suite 570 – 355 Burrard Street
Vancouver, B.C. V6C 2G8
Phone # 604-688-6800

Brokerage:
Address:
Phone #:
Date:
Authorized Signing Officer(s)

NOTE:

Original to Financial Institution
Copy to Real Estate Foundation of BC
Copy to be retained on file by Brokerage


 
 

Maintaining Trust Account Records

The following examples demonstrate the steps and procedures required by a brokerage in order to maintain books and records in accordance with RESA.

The examples are intended for brokerages with limited exposure to trust accounting. An example for each of trading services, rental property management and strata management is provided. Each example contains only a few basic transactions. The examples do not address all possible variations that brokerages may encounter. Managing brokers should contact their accountant for further assistance in the recording of more complex transactions.

The examples are provided for a manual accounting system. Brokerages with computerized accounting systems will have most of the exhibits contained in the examples automatically.

In each case, the trust accounting books and records required are the following:

  • Trust funds received and disbursed (ledgers);

  • trust journal;

  • trust bank reconciliations; and

  • trust liability reconciliations.

 

Trading Services Example

 

ABC Realty Ltd. is a newly licensed real estate company under RESA.This case will show how ABC Realty Ltd. records all its trust transactions and maintains its trust accounting books and records in accordance with general trust accounting principles and RESA. Please note that this case is for a manual accounting system. Brokerages with computerized accounting systems will have most of the following exhibits automated.

EXHIBIT I

TRUST FUNDS RECEIVED AND DISBURSED

RECEIVED

Deal #

Seller/
Buyer

Date Funds Received

Date Funds Deposited to Bank

Pre-numbered Receipt #

Amount

1

A/B

January 17, 2008

January 18, 2008

1

$ 1,500.00

2

C/D

January 19, 2008

January 20, 2008

2

$ 1,000.00

3

E/F

January 24, 2008

January 24, 2008

3

$ 5,000.00

4

G/H

January 28, 2008

January 31, 2008

4

$ 10,000.00

5

I/J

January 30, 2008

January 31, 2008

5

$ 5,000.00

6

K/L

January 31, 2008

February 1, 2008

6

$ 20,000.00

1

A/B

January 17, 2008

January 18, 2008

7

$500.00

In accordance with section 27 of RESA, ABC Realty Ltd. has ensured that all trust funds received were deposited promptly into a pooled trust account. Please note the date trust funds were received and the date trust funds were deposited to the bank. A brokerage is required to deposit trust funds “promptly” upon receipt.

To assist their accountant in preparing the annual Accountant’s Report, ABC Realty Ltd. has recorded references such as the deal number and/or the seller/buyer on the bank deposit slip.

If the parties have agreed, in the Contract of Purchase and Sale, that the deposit is to be placed into an interest bearing term deposit on a specific date, the funds must initially be deposited into the pooled trust account and then placed in an interest bearing term deposit. Upon redemption of the term deposit, funds must be redeposited to the pooled trust account before being disbursed.

As there are no provisions in RESA which permit a brokerage to maintain non-trust funds in a trust account, ABC Realty Ltd. has ensured that it did not deposit non-trust funds or maintain a cash float in the brokerage trust account.

DISBURSED

Deal # Reference

Date Funds Disbursed

Cheque #

Date Cleared Bank

Amount

1

January 26, 2008

1

January 28, 2008

$ 2,000.00

2

January 28, 2008

2

February 2, 2008

$ 1,000.00

3

January 31, 2008

3

February 3, 2008

$ 5,000.00

In accordance with the “stakeholder” obligations of RESA, ABC Realty Ltd. has ensured that all trust disbursements were only made once the brokerage has been authorized to disburse the trust monies (i.e. lawyer/notary title registration confirmation, trust release signed by parties of original collapsed contract).

EXHIBIT II

TRUST JOURNAL

The trust journal records all receipts and all disbursements with reference to the deal number, a description of the party involved or the transaction, the receipt or cheque number, the amount of the receipt or disbursement and a running balance of the pooled trust account.

Description

Deal No.

Date

Amount Received

Receipt (Pre-numbered)

Amount Disb.

Chk.No.

Trust Balance

Balance Forward      

NIL

Received from Buyer B

# 1

January 17, 2008

$ 2,000.00

# 1

-

-

$ 2,000.00

Received from Buyer D

# 2

January 19, 2008

$ 1,000.00

# 2

-

-

$ 3,000.00

Received from Buyer F

# 3

January 24, 2008

$ 5,000.00

# 3

-

-

$ 8,000.00

Disbursed to General Account

# 1

January 26, 2008

-

-

$ 1,500.00

# 1

$ 6,500.00

Disbursed to Commission Trust Account

# 1

January 26, 2008

-

-

$ 500.00

# 4

$ 6,000.00

Disbursed to General Account

# 2

January 28, 2008

-

-

$ 1,000.00

# 2

$ 5,000.00

Received from Buyer H

# 4

January 28, 2008

$ 10,000.00

# 4

-

-

$ 15,000.00

Received from Buyer J

# 5

January 30, 2008

$ 5,000.00

# 5

-

-

$ 20,000.00

Disbursed to General Account

# 3

January 31, 2008

-

-

$ 5,000.00

# 3

$ 15,000.00

Received from Buyer L

# 6

January 31, 2008

$ 20,000.00

# 6

-

-

$ 35,000.00

Commission Trust Account Journal

Description

Deal No.

Date

Amount Received

Receipt (Pre-numbered)

Amount Disb.

Cheque No.

Trust Balance

Balance Forward      

NIL

Received from Trust-Rep A Smith

# 1

January 26, 2008

$ 500.00

#007

-

-

$500.00

ABC Realty Ltd. has ensured that the trust funds received and disbursed (see Exhibit I) were recorded in the trust journal records on a daily basis.

ABC Realty Ltd. has also ensured that the general accounts are updated on a weekly basis.

To assist their accountant in preparing the annual Accountant’s Report, ABC Realty Ltd. has recorded references, such as the deal number and/or the seller/buyer on the receipt, cheque, or electronic banking documentation.

EXHIBIT III

INDIVIDUAL TRUST LEDGERS

The individual trust ledgers include a separate ledger for each individual deal. Each ledger has a deal reference number and then lists the various transactions that occur with that particular deal. The record for each deal contains all of the receipts and disbursements which take place with this deal.

ABC Realty Ltd. has ensured that the trust funds received and disbursed (see Exhibit I) were recorded in the Individual Trust Ledgers on a daily basis as was done in the trust journal (see Exhibit II).

Deal # -Seller/Buyer

Description

Date

Receipt

Trust Receipt

Chk

Trust Disb.

Balance

1-A to BReceipt from Buyer BJanuary 17, 20081$ 1,500.00--$ 1,500.00
 Receipt from Co-Operating BrokerageJanuary 25, 20087$ 500.00  $ 2,000.00
 Payment to general-brokerage commissionJanuary 26, 2008  #1$ 1,500.00$ 500.00
 Payment to commission trust account-Rep A. SmithJanuary 26, 2008  #4$ 500.00-
Deal # -Seller/BuyerDescriptionDateReceiptTrust ReceiptChkTrust Disb.Balance
2-C to DReceipt from Buyer D 
Transfer to General
January 19, 2008 
January 31, 2008

$ 1,000.00


# 2

$ 1,000.00

$1,000.00

Deal # -Seller/BuyerDescriptionDateReceiptTrust ReceiptChkTrust Disb.Balance
3-E to FReceipt from Buyer F 
Transfer to general
January 24, 2008 
January 28, 2008

$ 5,000.00 


# 3

$ 5,000.00

$ 5,000.00

Deal # -Seller/BuyerDescriptionDateReceiptTrust ReceiptChkTrust Disb.Balance
4-G to HReceipt from Buyer HJanuary 28, 20084

$ 10,000.00

--

$ 10,000.00

Deal # -Seller/BuyerDescriptionDateReceiptTrust ReceiptChkTrust Disb.Balance
5-I to JReceipt from Buyer JJanuary 30, 20085

$ 5,000.00

--

$ 5,000.00

Deal # -Seller/BuyerDescriptionDateReceiptTrust ReceiptChkTrust Disb.Balance
6-K to LReceipt from Buyer LJanuary 31, 20086

$ 20,000.00

--

$ 20,000.00

At the end of each month, ABC Realty Ltd has ensured that a Trust Liability Reconciliation is made of the remaining balance (if any) on each individual trust ledger (see Exhibit VI).

In order to ensure that all the transactions have been recorded correctly, ABC Realty Ltd. has confirmed that the total of these individual trust ledgers agree to the total in the trust journal.

EXHIBIT IV

TRUST BANK STATEMENT

The following is a sample of a trust bank statement that would be received by the brokerage from the bank each month for each pooled trust account held for the brokerage. Please note that section 30 of RESA prohibits the withdrawal of service charges from a pooled trust account and section 29 requires that interest on a pooled trust account is forwarded to the Real Estate Foundation of BC.

Bank of British Columbia 
Account # 123456 
Bank Statement as at January 31, 2008

ABC Realty Ltd.
Trust Account

Transaction Details

Date

Description

Amounts debited from your account ($)

Amounts credited to your account ($)

Balance ($)

Business Current Account #123456

Account type: POOLED TRUST

 

Business name:

ABC Realty Ltd.

January 1, 2008

Opening balance

  

0.00

Jan 18

Deposit

$ 2,000.00

-

$ 2,000.00

Jan 20

Deposit

$ 1,000.00

-

$ 3,000.00

Jan 24

Deposit

$ 5,000.00

 

$ 8,000.00

Jan 26

Cheque, NO. 001

 

$ 1,500.00

$ 6,500.00

Jan 26

Cheque, NO. 002

 

$ 500.00

$ 6,000.00

Jan 31

Deposit

$ 10,000.00

 

$ 16,000.00

Jan 31

Deposit

$ 5,000.00

 

$ 21,000.00

Jan 31

Closing totals

$ 23,000.00

$ 2,000.00

$ 21,000.00

Bank of British Columbia 
Account # 123457 
Bank Statement as at January 31, 2008

ABC Realty Ltd.
Commission Trust Account

Transaction Details

Date

Description

Amounts debited from your account ($)

Amounts credited to your account ($)

Balance ($)

Business Current Account #123457

Account type: POOLED COMMISSION TRUST

Business name:

ABC Realty Ltd.

     

January 1, 2008

Opening balance

  

0.00

Jan 26

Receipt 007

$ 500.00

 

$ 500.00

     

Jan 31

Closing totals

$ 500.00

nil

$ 500.00

ABC Realty Ltd. has reviewed the trust bank statement to ensure that:

  • the information displayed is accurate (agrees to all bank deposit slips and cancelled cheques);
  • no service charges have been withdrawn from the trust account; and
  • the bank has forwarded the interest earned on the trust account to the Real Estate Foundation of BC.

EXHIBIT V

TRUST BANK RECONCILIATION AS AT JANUARY 31, 2008

ABC Realty Ltd. has ensured that the monthly trust bank reconciliation(s) were prepared no later than five weeks after the monthly accounting cut-off date for the accounts or immediately upon receipt of the trust bank statement(s).

Balance Per Bank Statement as at January 31, 2008(This balance is taken from the bank statement on the previous page.)

$ 21,000.00

Add: Outstanding Deposits (Note: Deposits made before the end of the month per the trust journal but which are not shown on the bank statement should be entered here.)

 

Receipt #

Date

Amount

 

6

January 31, 2008

* $ 20,000.00

20,000.00

Subtotal

41,000.00

Less: Outstanding Cheques (Note: Cheques written before the end of the month per the trust journal which have not yet cleared the account should be entered here.)

 

Cheque #

Date

Amount

 

3

January 31, 2008

$ 5,000.00

 

2

January 28, 2008

1,000.00

6,000.00

Adjusted Bank Balance as at January 31, 2008 (This amount should agree with the balance on the trust journal [Exhibit II] and the trust liability reconciliation [Exhibit VI] at the end of the month

$ 35,000.00

*Note: This deposit was placed in a separate interest bearing trust account in the name of the client.

Commission Trust Account

Balance Per Bank Statement as at January 31, 2008(This balance is taken from the bank statement on the previous page.)

$ 500.00

Add: Outstanding Deposits (Note: Deposits made before the end of the month per the trust journal but which are not shown on the bank statement should be entered here.)

 

Receipt #

Date

Amount

 
   

0

Subtotal

0

Less: Outstanding Cheques(Note: Cheques written before the end of the month per the trust journal which have not yet cleared the account should be entered here.)

 

Cheque #

Date

Amount

 
    

Subtotal

0

Adjusted Bank Balance as at January 31, 2008 (This amount should agree with the balance on the trust journal [Exhibit II] and the trust liability reconciliation [Exhibit VI] at the end of the month

$ 500.00

 

EXHIBIT VI

TRUST LIABILITY RECONCILIATION AS AT JANUARY 31, 2008

The trust liability reconciliation is a summary of each individual outstanding client ledger.

ABC Realty Ltd. has ensured that the monthly trust liability reconciliation(s) were prepared no later than five weeks after the monthly accounting cut-off date for the accounts or immediately on receipt of the trust bank statement(s). Section 7-4(2) of the Rules requires that the for each trust account of a brokerage, the monthly reconciliations and the monthly trust asset and liability reconciliations must be reviewed, dated, and initialed by a related managing broker or by a person designated by a related managing broker.

ABC Realty Ltd. has also ensured that the total trust funds in the trust liability reconciliation(s) agree to the adjusted bank balance (see Exhibit V).

Deal #

Trust Funds

Commission Trust Funds

Comment

1

 

$ 500.00

Rep-A. Smith

4

$ 10,000.00

 

In pooled trust

5

$ 5,000.00

 

In pooled trust

6

$20,000.00

 

Term deposit certificate # 7

Total Trust Funds

$ 35,000.00

$ 500.00

 
  

$ 35,500.00

 
 

Rental Property Management Examples

DEF Rental Property Management Ltd. is a newly licensed rental property management company under RESA.

This case will show how DEF Rental Property Management Ltd. records all its trust transactions and maintains its trust accounting books and records in accordance with general trust accounting principles and RESA.

Please note that this case is for a manual accounting system. The brokerages with computerized accounting systems will have most of the following Exhibits automated.

EXHIBIT VII

TRUST FUNDS RECEIVED AND DISBURSED

Case facts:

  • three properties are being managed;
  • one rental property management pooled trust account is maintained;
  • rents are collected at the beginning of the month;
  • rental property expenditures are paid during the first 14 days of the month;
  • net rental amounts are paid on the 15th of the month to ensure that tenant cheques or electronic deposits have cleared their accounts; and
  • the management fee charged is 10% of gross rental receipts – for the purpose of this example, GST is included in the 10% of gross rental receipts.

TRUST FUNDS RECEIVED

Rental Property

Description

Date Deposit Received

Date Deposited to Bank

Receipt
(Pre-
numbered)

Amount

# 1

Rental receipt

January 1, 2008

January 2, 2008

# 1

$ 500.00

# 2

Rental receipt

January 2, 2008

January 3, 2008

# 2

$ 550.00

# 3

Rental receipt

January 2, 2008

January 3, 2008

# 3

$ 600.00

In accordance with section 27 of RESA, DEF Rental Property Management Ltd. has ensured that all the trust funds received were deposited promptly into a pooled trust account. Please note the date the trust funds were received and the date the trust funds were deposited to the bank. The brokerage is required to deposit trust funds “promptly” upon receipt.

To assist their accountant in preparing the annual Accountant’s Report, DEF Rental Property Management Ltd. has recorded references, such as the tenant name or rental property address, on the deposit slip and clearly indicated whether the rent payment was paid by cash, cheque, or electronic deposit.

As there are no provisions in RESA which permit a brokerage to maintain non-trust funds in a trust account, DEF Rental Property Management Ltd. has ensured that it did not deposit non-trust funds or maintain a cash float in the trust account.

TRUST FUNDS DISBURSED

Rental Property

Description

Date Funds Disbursed

Date Cleared Bank

Cheque #

Amount

# 1

Hydro payment

January 10, 2008

January 16, 2008

# 1

$ 100.00

# 1

Management fee

January 15, 2008

January 20, 2008

# 2

$ 50.00

# 1

Net rent paid to owner

January 15, 2008

January 17, 2008

# 3

$ 350.00

# 2

Repair

January 14, 2008

February 2, 2008

# 4

$ 250.00

# 2

Management fee

January 15, 2008

January 20, 2008

# 5

$ 55.00

# 2

Net rent paid to owner

January 15, 2008

January 16, 2008

# 6

$ 245.00

# 3

Management fee

January 15, 2008

January 18, 2008

# 7

$ 60.00

# 3

Net rent paid to owner

January 15, 2008

February 2, 2008

# 8

$ 540.00

 

EXHIBIT VIII

TRUST JOURNAL

The trust journal records all receipts and all disbursements with reference to the rental property number, a description of the transaction, the receipt or cheque number, the amount of the receipt or disbursement and a running balance of the pooled trust account.

Description

Rental Property

Date

Amount
Received

Receipt
(Pre-
numbered)

Amount
of Disb.

Cheque

Trust
Balance

Balance Forward

      

$ 275.00

Rental Receipt

# 1

January 1, 2008

$ 500.00

# 1

-

-

$ 775.00

Rental Receipt

# 2

January 2, 2008

$ 550.00

# 2

-

-

$ 1,325.00

Rental Receipt

# 3

January 2, 2008

$ 600.00

# 3

-

-

$ 1,925.00

Hydro Payment

# 1

January 10, 2008

-

-

$ 100.00

# 1

$ 1,1825.00

Repair Bill

# 2

January 14, 2008

-

-

$ 250.00

# 4

$ 1,575.00

Net rent sent to owner

# 1

January 15, 2008

-

-

$ 350.00

# 3

$ 1225.00

Net rent sent to owner

# 2

January 15, 2008

-

-

$ 245.00

# 6

$ 980.00

Net rent sent to owner

# 3

January 15, 2008

-

-

$ 540.00

# 8

$ 440.00

Management Fee Charged

# 1

January 15, 2008

-

-

$ 50.00

# 2

$ 390.00

Management Fee Charged

# 2

January 15, 2008

-

-

$ 55.00

# 5

$ 335.00

Management Fee Charged

# 3

January 15, 2008

-

-

$ 60.00

# 7

$ 275.00

DEF Rental Property Management Ltd. has ensured that trust funds received and disbursed (see Exhibit VII) were recorded in the trust journal for appropriate and timely accounting.

DEF Rental Property Management Ltd. has also ensured that the general accounts were updated for appropriate and timely accounting.

To assist their accountant in preparing the annual Accountant’s Report, DEF Rental Property Management Ltd. has recorded references on the cheque and the receipt, such as the rental property address and/or name and invoice # for supplier.

EXHIBIT IX

INDIVIDUAL TRUST LEDGERS

The individual trust ledgers include a separate ledger for each individual rental property management client which lists the various transactions that occur with that particular client. The record for each rental property management client contains all of the receipts and disbursements which take place with this client.

DEF Rental Property Management Ltd. has ensured that trust funds received and disbursed (see Exhibit VII) were recorded in the Individual Trust Ledgers on a daily basis, as was done on the Trust Journal (see Exhibit VIII).

DEF Rental Property Management Ltd. has also ensured that individual client ledgers were reproduced monthly and distributed to rental property owners as “monthly financial statements” which show the flow of client trust receipts and disbursements.

DEF Rental Property Management Ltd. has also forwarded a copy of the expenditure invoice(s) to rental property owners to support all disbursements.

Description

Date

Receipt

Trust Receipt

Cheque

Trust Disbursement

Balance

Rental Property # 1

Carry forward

    

$ 100.00

Rental receipt

January 1, 2008

# 1

$ 500.00

-

-

$ 600.00

Hydro payment

January 10, 2008

-

-

# 1

$ 100.00

$ 500.00

Management fee

January 15, 2008

-

-

# 2

$ 50.00

$ 450.00

Net rent paid to owner

January 15, 2008

-

-

# 3

$ 350.00

$ 100.00

Description

Date

Receipt

Trust Receipt

Cheque

Trust Disbursement

Balance

Rental Property # 2

Carry forward

    

$ 75.00

Rental receipt

January 2, 2008

# 2

$ 550.00

  

$ 625.00

Repair payment

January 15, 2008

-

-

# 4

$ 250.00

$ 375.00

Management fee

January 15, 2008

-

-

# 5

$ 55.00

$ 320.00

Net rent paid to owner

January 15, 2008

-

-

# 6

$ 245.00

$ 75.00

Description

Date

Receipt

Trust Receipt

Cheque

Trust Disbursement

Balance

Rental Property # 3

Carry forward

    

$ 100.00

Rental receipt

January 2, 2008

# 3

$ 600.00

-

-

$ 700.00

Management fee

January 15, 2008

-

-

# 7

$ 60.00

$ 640.00

Net rent paid to owner

January 15, 2008

-

-

# 8

$ 540.00

$ 100.00

At the end of each month, DEF Rental Property Management Ltd. has ensured that a Trust Liability Reconciliation (see Exhibit XII) is made of the remaining balance (if any) on each individual trust ledger. In order to ensure that all the transactions have been recorded correctly, DEF Rental Property Management Ltd. has confirmed that the total of these individual trust ledgers agrees with the total in the Trust Journal.

EXHIBIT X

RENTAL PROPERTY MANAGEMENT BANK STATEMENT

This is a sample of a trust bank statement that would be received by the brokerage from the bank each month for each pooled trust account held for the brokerage.

Please note that section 30 of RESA prohibits the withdrawal of service charges from a pooled trust account and section 29 requires that interest on a pooled trust account is forwarded to the Real Estate Foundation of BC.

If, however, the agent maintains a specific trust account for security deposits in order to ensure that the interest earned will be paid to the tenant, this account would not be subject to the requirements of section 29(2).

Bank of British Columbia 
Account # 45678 
Bank Statement as at January 31, 2008

DEF Rental Property Management Ltd.
Trust Account (Rental Property Management)

Transaction Details

Date

Description

Amounts debited from your account ($)

Amounts credited to your account ($)

Balance($)

Business Current Account #45678

Account type: POOLED RENTAL TRUST

Business name:

DEF Rental Property Management Ltd.

     

January 1, 2008

Opening balance

  

$ 275.00

Jan 2

Deposit

$ 500.00

-

$ 775.00

Jan 3

Deposit

$ 550.00

-

$ 1,325.00

Jan 3

Deposit

$ 600.00

 

$ 1,925.00

Jan 16

Cheque, NO. 001

 

$ 100.00

$ 1,825.00

Jan 16

Cheque, NO. 006

 

$ 245.00

$ 1,580.00

Jan 17

Cheque, NO. 003

 

$350.00

$ 1,230.00

Jan 18

Cheque, NO. 007

 

$60.00

$ 1,170.00

Jan 20

Cheque, NO. 002

 

$50.00

$ 1,120.00

Jan 20

Cheque, NO. 005

 

$55.00

$ 1,065.00

Jan 31

Closing totals

$ 1,650.00

$860.00

$ 1,065.00

DEF Rental Property Management Ltd. has reviewed the rental property management trust bank statement to ensure that:

  • the information displayed is accurate (agrees to all bank deposit slips and cancelled cheques);

  • no service charges have been withdrawn from the trust account; and
  • the bank has forwarded the interest earned on the trust account to the Real Estate Foundation of BC.

EXHIBIT XI

RENTAL PROPERTY MANAGEMENT

TRUST BANK RECONCILIATION

DEF Rental Property Management Ltd. has ensured that the monthly trust bank reconciliation(s) were prepared no later than five weeks after the monthly accounting cut-off date for the accounts or immediately on receipt of the trust bank statement(s). Section 7-4(2) of the Rules requires that for each trust account of a brokerage, the monthly reconciliations and the monthly trust asset and liability reconciliations must be reviewed, dated, and initialed by a related managing broker or by a person designated by a related managing broker.

Balance Per Bank Statement as at January 31, 2008(This balance is taken from the bank statement shown above.)

$ 1,065.00

Add: Outstanding Deposits(Note: Deposits made before the end of the month per the Trust Journal but which are not yet shown on the bank statement should be entered here.)

0

Subtotal

$ 1,065.00

Less: Outstanding Cheques(Note: Cheques written before the end of the month per the Trust Journal but which have not yet cleared the account should be entered here.)

0

Cheque #

Date

Amount

 

4

January 14, 2008

$ 250.00

 

8

January 15, 2008

$ 540.00

$ 790.00

Adjusted Balance Per Bank as at January 31, 2008 (This amount should agree with the balance on the trust journal [Exhibit VIII] and the trust liability reconciliation [Exhibit XII] at the end of the month)

$ 275.00

 

EXHIBIT XII

RENTAL PROPERTY MANAGEMENT

TRUST LIABILITY RECONCILIATION

The trust liability reconciliation is a summary of each individual outstanding client ledger (per Exhibit IX).

DEF Rental Property Management Ltd. has ensured that the monthly trust liability reconciliation(s) were prepared no later than five weeks after the monthly accounting cut-off date for the accounts or immediately on receipt of the trust bank statement(s).

DEF Rental Property Management Ltd. has also ensured that the total trust funds in the trust liability reconciliation(s) agree to the adjusted bank balance (see Exhibit XI).

Rental Property #

Trust Funds

1

$ 100.00

2

$ 75.00

3

$ 100.00

Total

$ 275.00

 

Strata Management Examples

GHI Strata Management Inc. manages three strata corporations. GHI maintains an operating trust account and a contingency reserve trust account for each strata corporation. Strata fees, which include a contribution to the contingency reserve fund, are collected at the beginning of each month.

The strata management fee charged is based upon a monthly fee and established by the approved annual budget for the strata corporation.

Exhibit XIII

Trust Funds Received and Disbursed

TRUST FUNDS RECEIVED

Section 7-9(2) of Rules describes requirements where a brokerage holds or receives money on behalf of a strata corporation.

Strata Corp Operating Account Reference

Strata Unit

Description

Date Deposit Received

Date Deposited to Bank

Receipt
(Pre-
numbered)

Amount

# LMS1

123

Strata Fee receipt

January 1, 2008

January 2, 2008

# 1

$ 500.00

# LMS1

456

Strata Fee receipt

January 1, 2008

January 2, 2008

# 2

$ 550.00

In accordance with section 27 of RESA, GHI Strata Management Inc. has ensured that all the trust funds received were deposited promptly into an operating trust account maintained in trust by the brokerage on behalf of the strata corporation. Please note the date the trust funds were received and the date the trust funds were deposited to the bank. The brokerage is required to deposit trust funds “promptly” upon receipt.

To assist their accountant in preparing the annual Accountant’s Report, GHI Strata Management Inc. has recorded references, such as the strata lot number or strata unit address, on the deposit slip and clearly indicated whether the strata fee payment was paid by cash, cheque, or electronic deposit.

As there are no provisions in RESA which permit a brokerage to maintain non-trust funds in a trust account, GHI Strata Management Inc. has ensured that it did not deposit non-trust funds or maintain a cash float in the trust account.

Electronic Deposits

Section 2.1 of the Rules requires that if a brokerage receives money by way of electronic funds deposit (EFT) into a brokerage trust account that receives funds on behalf of more than one strata corporation, the money must be transferred to the applicable trust account no later than three days after the day on which it was received.

Strata Corp EFT Account Reference

Strata Unit

Description

Date Deposit Received

Date trf to Strata Operating Account

Receipt
Ref

Deposit Amount

Transfer Amount

# LMS1

 

Jan Strata Fee receipts

January 2, 2008

 

EFT1

$ 1,875.00

 

# LMS1

506

Strata Fee receipt

 

January 5, 2008

www74

 

$ 575.00

# LMS1

1112

Strata Fee receipt

 

January 5, 2008

www849

 

$ 600.00

# LMS1

5556

Strata Fee receipt

 

January 5, 2008

www613

 

$ 700.00

Other Remuneration – i.e.: Forms B & F Fees from a Person other than the Principal

Section 5-15.1 of the Rules identifies some remuneration that is not required to be paid into the brokerage trust account, such as the fees for the completion of Forms B & F where authorized by the service agreements and the remuneration has been earned.

TRUST FUNDS DISBURSED

Strata Corporation Account Reference

Description

Date Funds Disbursed

Date Cleared Bank

Cheque # Ref

Amount

# LMS1

Hydro Utility payment

January 10, 2008

January 16, 2008

# 101

$ 100.00

# LMS1

Strata Management fee

January 15, 2008

January 20, 2008

# 102

$ 126.00

# LMS1

Trf to CRF – Jan

January 31, 2008

February 3, 2008

Trf 123

$ 50.00

Trust Funds Transferred to Contingency Reserve

Section 7-9(3) of the Rules requires that for amounts received that include contingency reserve fund money or special levy money or both, it must be paid into an applicable trust account or to the strata corporation. Additionally, section 7-9(4) of the Rules requires that, if applicable, within seven days after the end of the month in which the contingency reserve fund or special levy money is received, the brokerage must either pay the money over to the strata corporation or transfer it to an applicable trust account.

Strata Corporation Account Reference

Description

Date Funds Transferred

Date Cleared Bank

Trf Ref #

Amount

# LMS1-CRF

Trf from Operating – Jan

Jan 31, 2008

Feb 3, 2008

Trf 123

$ 50.00

Trust Funds Transferred to a Pooled Trust Account for Payments on Behalf of More than One Strata Corporation

Section 7-9(5) of the Rules requires that if money is transferred to a pooled trust account for one or more strata corporations, the brokerage must promptly pay the money on behalf of the strata corporation.

EXHIBIT XIV

TRUST JOURNAL

The trust journal records all receipts and all disbursements with reference to the strata corporation number, a description of the transaction, the receipt or cheque number, the amount of the receipt or disbursement and a running balance of the designated strata trust account.

LMS1

Description

Operating

Strata Unit

Date

Amount
Received

Receipt Ref

Amount
of Disb.

Chk #

Trust
Balance

Balance Fwd.

      

NIL

Strata Fee Receipt

# 123

January 1, 2008

$ 500.00

 

-

-

$ 500.00

Strata Fee Receipt

# 456

January 2, 2008

$ 550.00

 

-

-

$ 1,050.00

Strata Fee Receipt

# 506

January 5, 2008

$ 575.00

 

-

-

$ 1,625.00

Strata Fee Receipt

# 1112

January 5, 2008

$ 600.00

 

-

-

$ 2,225.00

Strata Fee Receipt

# 5556

January 5, 2008

$ 700.00

 

-

-

$ 2,925.00

Hydro Utility Payment

Jan

January 10, 2008

-

-

$ 100.00

101

$ 2,825.00

Strata Management Fee Charged

Jan

January 15, 2008

-

-

$ 126.00

102

$ 2,699.00

Trf to CRF

Jan

January 31, 2008

  

$ 50.00

Trf123

$ 2,649.00

Description

LMS1-CRF

Strata Unit

Date

Amount
Received

Receipt Ref

Amount
of Disb.

Chk #

Trust
Balance

Balance Fwd.

      

$ 10,000.00

Jan trf from Operating

  

$ 50.00

Trf 123

  

$ 10,050.00

LMS1-CRF

GHI Strata Management Inc. has ensured that trust funds received and disbursed (see Exhibit XIII) were recorded in the trust journal on a daily basis. GHI Strata Management Inc. has also ensured that the general accounts were updated on a weekly basis.

To assist their accountant in preparing the annual Accountant’s Report, GHI Strata Management Inc. has recorded references on the cheque and the receipt, such as the strata corporation and strata unit reference and invoice # for supplier.

EXHIBIT XV

STRATA MANAGEMENT BANK STATEMENT

This is a sample of a trust bank statement that would be received by the brokerage from the bank each month for each trust account held for the brokerage.

Bank of British Columbia 
Account # 2468 
Bank Statement as at January 31, 2008

 

GHI Strata Management Inc.
In Trust For LMS1-Operating

Date

Description

Amounts debited from your account ($)

Amounts credited to your account ($)

Balance($)

Business Current Account #2468

Account type: OPERATING STRATA TRUST

Business name:

GHI Strata Management Inc. In Trust For LMS1-Operating

     

January 1, 2008

Opening balance

  

0.00

Jan 2

Deposit

$ 500.00

-

$ 500.00

Jan 2

Deposit

$ 550.00

-

$ 1,050.00

Jan 5

www74

$ 575.00

 

$ 1,625.00

Jan 5

www849

$ 600.00

-

$ 2,225.00

Jan 5

www613

$ 700.00

 

$ 2,925.00

Jan 16

Cheque, NO. 101

 

$ 100.00

$ 2,825.00

Jan 20

Cheque, NO. 102

 

$ 126.00

$ 2,699.00

January 31

Closing totals

$ 2,925.00

$
226.00

$
2,699.00

      

Bank of British Columbia 
Account # 2468 -1
Bank Statement as at January 31, 2008

 

GHI Strata Management Inc.
In Trust For LMS1-CRF

Date

Description

Amounts debited from your account
($)

Amounts credited to your account
($)

Balance($)

Business Current Account #2468-1

Account type; OPERATING STRATA TRUST

Business name:

GHI Strata Management Inc. In Trust For LMS1-CRF

     

January 1, 2008

Opening balance

  

$ 10,000.00

January 31

Closing totals

nil

nil

$ 10,000.00

        

GHI Strata Management Inc. has reviewed the strata property management trust bank statement to ensure that the information displayed is accurate (agrees to all bank deposit slips and cancelled cheques).

EXHIBIT XVI

STRATA PROPERTY MANAGEMENT

TRUST BANK RECONCILIATION

GHI Strata Management Inc has ensured that the monthly trust bank reconciliation(s) were prepared by the 15th of the following month or immediately upon receipt of the trust bank statement(s).

LMS1-Operating

Balance Per Bank Statement as at January 31, 2008(This balance is taken from the bank statement shown above.)

$ 2,699.00

Add: Outstanding Deposits & Transfers(Note: Deposits and transfers instructed before the end of the month per the Trust Journal but which are not yet shown on the bank statement should be entered here.)

0

Subtotal

$ 2,699.00

Less: Outstanding Cheques & Transfers(Note: Cheques and transfers issued before the end of the month per the Trust Journal but which have not yet cleared the account should be entered here.)

 

Cheque/Transfer Ref #

Date

Amount

 

Jan CRF

January 31, 2008

$ 50.00

 
   

$ 50.00

Adjusted Balance Per Bank as at January 31, 2008 (This amount should agree with the balance on the trust journal [Exhibit XIV] and the trust liability reconciliation [Exhibit XVII] at the end of the month)

$ 2,649.00

 

LMS1-CRF

Balance Per Bank Statement as at January 31, 2008(This balance is taken from the bank statement shown above page.)

$ 10,000.00

Add: Outstanding Deposits & Transfers(Note: Deposits and transfers instructed before the end of the month per the Trust Journal but which are not yet shown on the bank statement should be entered here.)

$ 50.00

Subtotal

$ 50.00

Less: Outstanding Cheques & Transfers (Note: Cheques and transfers issued before the end of the month per the Trust Journal but which have not yet cleared the account should be entered here.)

0

Cheque/Transfer Ref #

Date

Amount

 
  

nil

 
   

$ 0

Adjusted Balance Per Bank as at January 31, 2008 (This amount should agree with the balance on the trust journal [Exhibit XIV] and the trust liability reconciliation [Exhibit XVII] at the end of the month)

$ 10,050.00

 

EXHIBIT XVII

STRATA PROPERTY MANAGEMENT

TRUST LIABILITY RECONCILIATION

The trust liability reconciliation is a summary of each individual outstanding client ledger (per Exhibit XV).

GHI Strata Management Inc. has ensured that the monthly trust liability reconciliation(s) were prepared no later than five weeks after the monthly accounting cut-off date for the accounts or immediately on receipt of the trust bank statement(s).

GHI Strata Management Inc. has also ensured that the total trust funds in the trust liability reconciliation(s) agree to the adjusted bank balance (see Exhibit XVI).

Strata Property Ref #

Trust Funds

LMS1

$ 2,649.00

LMS1-CRF

$ 10,050.00

  

Total

$ 12,699.00