Property Management
Transcript: Property Management, a License Law Perspective Presented by Melanie Brooks Alabama License Law The Alabama License Law is written for ALL licensees. This includes property management firms. IF the property management firm is not licensed, and they are only leasing their OWN privately owned properties this law does not apply. Fair Housing rules apply to any owner who rents more than 3 properties, and all licensees. This sometimes confuses people. Alabama License Law Escrow Accounts 790-X-3.-03. Deposit ... 790-X-3.-03. Deposit Of Funds. 1)The deposit and accounting for at all times of all funds belonging to or being held for others in a separate federally insured account or accounts in a financial institution located in Alabama shall require that the qualifying broker be a customer of the financial institution holding all such accounts and the qualifying broker shall be one of the persons with authority to deposit and withdraw funds and to write or make checks as necessary on all such accounts. Escrow Accounts 790-X-3.-03. Deposit Of Funds. If the funds are held by the Alabama Broker, the funds must be in a financial institution within Alabama. Notice is says “Financial Institution.” It must be federally insured but does not have to specifically be a bank. It could be a credit union or other type of “Financial Institution”. Point 2 of the Law (2) Each real estate salesman or associate broker shall pay over to his or her qualifying broker all funds coming into his or her possession in trust for other parties immediately upon receipt of same. Point 2 of the Law This does not mean it must be deposited, just turned ov... This does not mean it must be deposited, just turned over. Yes this means immediately. Not when it becomes a contract, or any other date. Each broker should have a “holding” area in a locked and secure place within their office. Open Can of Worms now. Point 3 of the Law (3) Each qualifying broker is responsible for deposit of all funds belonging to others coming into his or her possession or of a salesperson or Associate broker licensed under him or her where such funds are to be held in trust, unless the qualifying broker is expressly relieved of such responsibility in writing. In cases where the funds are U. S. currency, i.e. cash as opposed to a check or note, these funds shall be deposited immediately. In cases where a check is received as earnest money and the contract form states that the check is to be held for a specific length of time or until the occurrence of a specific event, then the check shall be deposited when the contract form states, or if no time for deposit is specified in the contract form, then the check shall be deposited when the offer becomes a contract. Point 3 of the Law All of the following are exceptions but must be ... All of the following are exceptions but must be in writing and agreed to by all parties. A Broker can be relieved of the responsibility of the escrow funds. Escrow Funds can be held for a specific length of time Escrow can be Non Refundable Any agency can hold the escrow funds Seller Can hold the Escrow Point 4 of the Law (4) Funds to be held in trust under a contract for sale involving more than one qualifying broker shall be held and deposited by any of the qualifying brokers involved in the sale. All funds to be held in trust, whether by contract for sale, or by lease or property management agreement, shall be held and deposited by the qualifying broker who is providing these services to the owner. In cases where a successor qualifying broker is to provide these services, the first broker shall provide a complete accounting of the funds and shall transfer the funds to the successor broker. The qualifying broker who is currently providing services to the owner shall be responsible to the public and to the commission for all funds. Upon request by the Commission or its authorized representative, each qualifying broker shall promptly account for any trust funds being held by that qualifying broker. Point 4 of the Law Any Qualifying Broker can hold t... Any Qualifying Broker can hold the escrow funds Selling Agency or Listing Agency can hold the escrow funds Here is where the funds can leave Alabama It has been our custom to hold escrow funds in the account of the listing agency it has NEVER been the LAW Open 2nd can of worms now Point 5 & 6, Disbursement (5) Each qualifying broker shall promptly disburse to the appropriate party or parties any trust funds within 7 days of the consummation of the transaction for which the funds were deposited. If for any reason the transaction is not consummated, or if for any reason there is a disagreement involving to whom trust funds should be disbursed, the qualifying broker shall not disburse any trust funds except pursuant to a written agreement signed by all parties or pursuant to a court order. (6) This Rule shall not prohibit a broker from depositing with the appropriate court any trust funds which are the
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