Brokers

Download and fill in the Broker Form. Review the instructions for financial institutions from licensees.

Add your banking information where indicated and take the Broker Form to your bank to initiate remittances. Your bank should keep a copy on record.

Email a copy of the form, signed by a banking representative to brokers@aref.ab.ca.

All Brokerages must have a trust account set up with the Foundation as the designated recipient (see the Broker Form). All interest on trust accounts is payable to the Foundation EXCEPT the following, as outlined in section 69 of the Real Estate Act and/or section 2(1) of the Exemption Regulation:

• nonprofit organizations that lease, rent, collect rent, or otherwise act or advertise for subsidized residential properties;
• on-site building managers (as long as they do not negotiate/approve leases or rental agreements);
• not-pooled trust accounts; and,
• security deposits.

Not-pooled trust accounts exist where a client requests that their funds be held in a separate account from the Brokerage’s regular trust account.

Interest from trust accounts holding security deposits is payable to the tenant annually or, if agreed to in writing, paid at the expiration or termination of the tenancy in an amount calculated at the prescribed rate as defined in the Security Deposit Interest Rate Regulation of the Residential Tenancies Act or higher if agreed to by the tenant. Any interest remaining after the prescribed or agreed rate is paid may be kept by the property manager.

To enable your bank to set up a trust account for automatic remittance of the interest to the Foundation, please fill out the Broker Form. Once you have filled out the Brokerage section of the form, take the form to your bank representative to complete.

Once the form is completed, the bank must keep one copy, the brokerage must keep one copy and one copy must be sent to the Foundation to brokers@aref.ab.ca.

The accounts will be verified to ensure interest is remitted according to the Real Estate Act.

If your Brokerage changes banks and a new trust account is set up, you will need to submit a new Broker Form.

You will also need to let the Foundation know you have cancelled your previous trust account and with which bank. Your declaration of Broker Banking Information form for that year should report both accounts and the time periods for which they were active.

All Brokerages, which includes property managers, are required to keep and operate a trust account as outlined in Part 2 of the Real Estate Act. Property management includes:

• Leasing, negotiation, approving, or offering to lease, negotiate, or approve the lease or rental of real estate;
• Holding money related to leasing or renting real estate;
• Advertising leasing or renting real estate services;
• Providing condominium management services; and,
• Collecting or offering/attempting to collect rent or other money for the control, management, or administration of real estate.

Funds which are subject to being placed in a trust account in a property management setting include:

• any money defined in the management agreement with the property manager;
• funds, such as rental payments, received on behalf of the property owner; and,
• security deposits.

Trust accounts for property management activities should be separate from trust accounts for real estate and mortgage brokerage activities. Security deposits must be maintained in a separate trust account.

Property managers are required to follow the requirements for handling of the trust account monies as listed in section 25 of the Real Estate Act. These include:

• Keeping accurate and complete financial records for each client;
• Depositing money received in trust within 3 business days of receipt or, in the case of money received for an offer to purchase, 3 business days of the acceptance of the offer to purchase, or any period agreed in writing between you and your client(s) in an interest bearing, designated trust account with a bank, loan corporation, trust corporation, credit union, or treasury branch located within Alberta (or within Lloydminster if you maintain your business premises in Lloydminster);
• Keeping trust account money separate from general funds for your business;
• Disbursing money from the trust account in accordance with general trust safety rules;
• Ensuring that the terms of the trust are in writing and agreed to between yourself and your client(s);
• If, after 2 years after payment was to be made to a person and that person cannot be located after reasonable efforts are made, remitting the money held in trust to the Foundation along with the name of the person, the circumstances around it being unclaimed, and a breakdown of the funds; and,
• Keeping all records and books of accounts of your business and accounting records for 3 years or longer if directed by the Executive Director of the Real Estate Council of Alberta.

Property managers must remit interest from trust accounts to the Alberta Real Estate Foundation with some exceptions as noted in the above FAQ: What kind of interest must be remitted to the Alberta Real Estate Foundation?

An unclaimed deposit may be reclaimed by the beneficial owner at any time as per the Real Estate Act, Section 25(6). If an unclaimed deposit has been forwarded to the Alberta Real Estate Foundation, and is subsequently claimed by a beneficial owner or the beneficial owner’s estate, notify the Alberta Real Estate Foundation in writing and provide the following information:

• Name of the beneficial owner;
• Amount submitted to the Foundation; and
• Date of submission.

The Alberta Real Estate Foundation will confirm that the funds were received, and will issue a cheque in the amount of the refund to the Brokerage. The Brokerage should then refund the claim to the beneficial owner. This creates a paper trail which protects the Brokerage as well as the Alberta Real Estate Foundation.

Unclaimed deposits, or unclaimed interest on deposits, must be remitted to the Foundation after:

• At least two (2) years have passed since your client was entitled to receive the funds back; and
• Reasonable efforts have been made to locate the beneficial owner of the funds.

Unclaimed deposits must be remitted to the Foundation in the form of a cheque from the trust account along with the letter detailing the original transaction the funds are connected to, as well as the efforts made to locate the beneficial owner of the funds.

Unclaimed deposits must be accompanied by the following information:

• Circumstances resulting in the money being unclaimed;
• Name of the beneficial owner of the funds;
• Statement of attempt to locate beneficial owner; and
• Date of transaction collapse.
  

Contact the Foundation immediately if any of the following issues arise:

• Your brokerage has closed and ceased operations;
• There are unclaimed security funds in your brokerage’s trust account;
• There are funds due to the Foundation as a result of an audit;
• Your brokerage’s Financial Institution will not accept or process the Broker Form;
• Your brokerage’s trust account does not appear to be remitting interest to the Foundation as defined by the Real Estate Act.