What is the primary function of a trust account?

The primary function of a trust account is to hold funds that belong to clients for transactions. A trust account is a special type of account established by a real estate broker to ensure that client funds, such as earnest money deposits or rental payments, are kept separate from the broker's personal or operating funds. This segregation protects the client’s money and ensures it is used only for its intended purpose, such as facilitating real estate transactions or managing property.

By maintaining trust accounts, brokers adhere to legal and ethical standards, providing assurance to clients that their funds are being managed responsibly and securely. Trust accounts also help brokers maintain clear records and accountability for how client funds are handled throughout the transaction process, which is essential for transparency and compliance with real estate regulations.