Article Side

Online Article Directory!

Hello Guest! Login or Register to submit articles!

Trust Funds and Trust Fund Maintenance

By Ashoka Lion Subscribe to RSS | June 15th 2012 | Views:
loading
 
  



When tenants rent units from you they are placing not only their financial investment in the landlord’s hand, but also their trust that you, as the property manager, have their best interests at heart. When a security deposit or rent is paid, the tenant is communicating their confidence that their needs will be met and their money is in good hands. That is where the concept of a real estate/broker trust fund comes into play. Trust funds are separate bank accounts in which only a certain type of money is deposited. This money is designed to protect the tenant’s investment and ensure that money is available for property expenses and deposit reimbursements. The Federal Deposit Insurance Corporation (FDIC) insures up to $250,000 for each individual who has monies deposited into a trust account. The most common deposits into trust funds come from, including:

1. Money deposits

2. Down payments

3. Rental security deposits

4. Association dues

Property manager such as our firm who operate in Houston and Dallas, you are required by the new Texas property code, to employ a licensed real estate broker to handle your tenant’s monies. It is important for owner’s to find qualified licensed people to help provide oversight on their property management activities.

Trust Fund Maintenance

The new Texas bill 747 requires rent collection to be the duty of a broker. Investors and property managers in the Dallas or Houston areas are strongly advised to hire an accredited broker immediately and to require a trust fund be established for all rental-related monies. In creating this fund, always keep in mind that the monies deposited are there for a reason. The rent, security deposits and any other monies associated with your rental properties need to be managed responsibly so there is enough money for property maintenance, refunds, and emergencies. When discussing the creation of a trust fund with your broker, make certain that the following guidelines are in place.

1. The account is clearly labeled and understood by the bank to be a ‘Trust Fund’ or ‘Trust Account.’

2. All monies collected should be deposited into the trust fund immediately with proof of deposit.

3. Maintain complete and accurate records of all deposits and withdrawals. Document the reasoning for the withdrawal or deposit.

4. Copies of leases or agreements must be in correspondence with this account.

5. In the event of an audit, the records will have sufficient evidence of all transactions, including: deposits, cancelled checks, check receipts, etc.

6. Funds in the trust account will be available for property expenses under certain circumstances:

a. Written agreement that the broker has authority to use rent monies for property expenses

b. Sufficient funds are available to fulfill expenses for both the tenants and the property expenses.

Current or prospective investors in Texas (like our owners in the Houston and Dallas markets) should rely on a property management firm having a licensed broker who can provide them with and maintain a trust account. Especially for first time investors who do not know a great deal about property management, they will now be protected that their monies are protected by licensed and qualified firms who under the oversight of TREC. Investors will soon sit down with property management firm overtime so that they can understand what the property management firm’s policies and procedures are concerning rent collection and trust account accounting. Trust accounts are, simply put, an accredited way to avoid mismanaging client’s monies in a segregated an clearly labeled bank account.

Prepare your property management firm’s around Texas to learn that the days of unregulated property management activities seems to be drawing to a close. TREC supervision will provide a framework to protect consumers from property managers or real estate that are ill advised and educated about the industry providing services and harming public trust for the entire industry.

Ashoka Lion - About Author:
Jay Raman is the managing director of Ashoka Lion, a Houston and Dallas area property management firm. Ashoka Lion is a full licensed real estate brokerage in the Houston and Dallas Markets, and you can verify Ashoka Lion’s license with the Texas Real Estate Commission.
visit: http://rental-property-management.ashokalion.com/

Share on Facebook Tweet It Stumbleupon this post This post is delicious !

Article Source:
http://www.articleside.com/business-articles/trust-funds-and-trust-fund-maintenance.htm

Related Business Articles Subscribe to RSS

Strata management solution and benefits
Published by Chris Whelan on February 29th 2012 | Business
Previously people didn’t face such difficulties during dividing their property or acquiring their ...
 
Zodiac Solutions Inc- Making effective management your criteria for growth
Published by Rahul on July 24th 2012 | Business
To help your organization’s success stay constant even in the times of economic slowdown, there ar...
 
Supply chain management is incomplete without pick and pack services
Published by Diego Hall on December 15th 2011 | Business
Pick and pack services are integral parts of a business. These services are so crucial that they can...
 
The Importance of Letting agents and Residential property management Dublin
Published by Leslie Hoffman on January 14th 2012 | Business
Hiring experienced letting agents and residential property management Dublin is extremely important ...
 
Versatile restaurant management systems available online
Published by Vem Call on May 24th 2012 | Business
In today's competitive hospitality market, meeting a customer's expectations is imperative in order ...
 
Mini self storage Beale AFB: vital to safe property from climates & other difficulties
Published by Erleroadself on November 30th 2011 | Business
Since Mini self storage Beale AFB is essentially helpful for individuals who are planning of moving....
 
Benefits of hiring the services of agencies for getting property to rent and other things to be look into
Published by Cathrine Mckay on June 6th 2012 | Business
Taking the property to rent by hiring the services of agencies is although expensive for you yet it ...
 
Make waste management easy with skip bins
Published by Matthew Arthur on August 6th 2012 | Business
Waste, trash or garbage is needed to be disposed in a proper way. There are many reputed companies w...
 
Temple Realtors offer specialized services related to property transactions
Published by Rori Lyn on March 2nd 2012 | Business
If you are planning to sell the house then the very first thing you would like to know is how much y...
 
Letting property to student tenants in Edinburgh
Published by Carol Riley on March 12th 2012 | Business
There are number of student tenants in Edinburgh. If you want to rent out your property to students ...
 
India Property – Tips on low cost techniques for maintaining your commercial property
Published by John Smith on March 7th 2012 | Business
As your India property ages, it will definitely cost you more to maintain the building particularly ...
 
Profitable property ahead in Gurgaon
Published by Atul Sharma on June 18th 2012 | Business
The article is based upon the real estate properties in Gurgaon. You can draw lot of information on ...
 
Financial management of a small business
Published by Adam Walker on April 11th 2012 | Business
Small business owners tend to many times think that it is best to do all the work by themselves. Tha...
 
How a landlord can manage his property in Edinburgh
Published by Carol Riley on March 19th 2012 | Business
Being a landlord you have to be very careful regarding the management of your property. You should b...
 
Efficient ship management - the biggest need of shipping business
Published by Saurabh Pandey on December 3rd 2011 | Business
If you are the owner of a ship then you might be looking for someone who can manage it so that you g...
 
Patents South Africa protect your intellectual property
Published by on June 19th 2012 | Business
Call a patent attorney that specializes in Patents South Africa and they provide you with peace of m...
 
Add value to your property with a superb extension using the very best architectural service London at Just Extend Your House Ltd
Published by James Blee on July 27th 2012 | Business
We are all well aware that the economy in the UK is at an all time low, credit and disposable income...
 
Services Offered by Property management Sioux Falls Companies
Published by Julia Roger on May 25th 2012 | Business
The Property management Sioux Falls companies are the most famous names in business. They have earne...
 
Try Being a More Energy Efficient Tenant in Your Edinburgh property
Published by Calum Rendall on April 2nd 2012 | Business
Many of us have gone through the troubles of credit crunch recently and this has taught us to be ene...
 
Property dealers Mohali to help buyers find the best property at lucrative price
Published by Deepti on April 12th 2012 | Business
Real estate market in India is witnessing a remarkable upsurge all over India, though there are stil...