Trading Services Examples

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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

Date #Seller/BuyerDate Funds ReceivedDate Funds Deposited to BankPre-numbered Receipt #Amount
1A/BJanuary 17, 2021January 18, 20211$1,500.00
2C/DJanuary 19, 2021January 20, 20212$1,000.00
3E/FJanuary 24, 2021January 24, 20213$5,000.00
4G/HJanuary 28, 2021January 31, 20214$10,000.00
5I/JJanuary 30, 2021January 31, 20215$5,000.00
6K/LJanuary 31, 2021February 1, 20216$20,000.00
1A/BJanuary 17, 2021January 18, 20217$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 # ReferenceDate Funds DisbursedCheque #2Date Cleared BankAmount
1January 26, 20211January 28, 2021$2,000.00
2January 28, 20212February 2, 2021$1,000.00
3January 31, 20213February 3, 2021$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.

DescriptionDeal No.DateAmount ReceivedReceipt (Pre-numbered)Amount DisbursedCheque No.Trust Balance
Balance ForwardNIL
Received from Buyer B# 1January 17, 2021$2,000.00# 1$2,000.00
Received from Buyer D#2January 19, 2021$1,000.00# 2$3,000.00
Received from Buyer F# 3January 24, 2021$5,000.00# 3$8,000.00
Disbursed to General Account# 1January 26, 2021$1,500.00# 1$6,500.00
Disbursed to Commission Trust Account# 1January 26, 2021$500.00# 4$6,000.00
Disbursed to General Account# 2January 28, 2021$1,000.00# 2$5,000.00
Received from Buyer H# 4January 28, 2021$10,000.00# 4$15,000.00
Received from Buyer J# 5January 30, 2021$5,000.00# 5$20,000.00
Disbursed to General Account# 3January 31, 2021$5,000.00# 3$15,000.00
Received from Buyer L# 6January 31, 2021$20,000.00# 6$35,000.00

Commission Trust Account Journal

DescriptionDeal No.DateAmount ReceivedReceipt (Pre-numbered)Amount DisbursedCheque No.Trust Balance
Balance ForwardNIL
Received from Trust-Rep A Smith#1January 26, 2021$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/BuyerDescriptionDateReceiptTrust ReceiptChequeTrust DisbursedBalance
1 — A to BReceipt from Buyer BJanuary 17, 20211$1,500.00$1,500.00
Receipt from Co-Operating BrokerageJanuary 25, 20217$500.00$2,000.00
Payment to general — brokerage commissionJanuary 26, 2021#1$1,500.00$500.00
Payment to commission trust account — Rep A. SmithJanuary 26, 2021#4$500.00
Deal # — Seller/BuyerDescriptionDateReceiptTrust ReceiptChequeTrust DisbursedBalance
2 — C to DReceipt from Buyer DJanuary 19, 20212$1000.00$1,000.00
Transfer to GeneralJanuary 31, 2021# 2$1,000.00
Deal # — Seller/BuyerDescriptionDateReceiptTrust ReceiptChequeTrust DisbursedBalance
3 — E to FReceipt from Buyer FJanuary 24, 20213$5,000.00$5,000.00
Transfer to GeneralJanuary 28, 2021# 3$5,000.00
Deal # — Seller/BuyerDescriptionDateReceiptTrust ReceiptChequeTrust DisbursedBalance
4 — G to HReceipt from Buyer HJanuary 28, 20214$10,000.00$10,000.00
Deal # — Seller/BuyerDescriptionDateReceiptTrust ReceiptChequeTrust DisbursedBalance
5 — I to JReceipt from Buyer JJanuary 30, 20215$5,000.00$5,000.00
Deal # — Seller/BuyerDescriptionDateReceiptTrust ReceiptChequeTrust DisbursedBalance
6 — K to LReceipt from Buyer LJanuary 31, 20216$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 ColumbiaAccount #123456Bank Statement as at January 31, 2021ABC Realty Ltd.Trust Account
Transaction Details
DateDescriptionAmounts debited from your account ($)Amounts credited to your account ($)Balance ($)
Business Current Account #123456Account Type: POOLED TRUST
Business Name:ABC Realty Ltd.
January 1, 2021Opening balance0.00
Jan 18Deposit$2,000.00$2,000.00
Jan 20Deposit$1,000.00$3,000.00
Jan 24Deposit$5,000.00$8,000.00
Jan 26Cheque, No. 001$1,500.00$6,500.00
Jan 26Cheque, No. 002$500.00$6,000.00
Jan 31Deposit$10,000.00$16,000.00
Jan 31Deposit$5,000.00$21,000.00
Jan 31Closing Totals$23,000.00$2,000.00$21,000.00
Bank of British ColumbiaAccount #123456Bank Statement as at January 31, 2021ABC Realty Ltd.Trust Account
Transaction Details
DateDescriptionAmounts debited from your account ($)
Business Current Account #123456Account Type: POOLED TRUST
Business Name:ABC Realty Ltd.
January 1, 2021Opening balance0.00
Jan 26Receipt 007$500.00$500.00
Jan 31Closing totals$500.00nil$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, 2021

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, 2021 (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 #DateAmount
6January 31, 2021*$20,000.0020,000.00
Subtotal41,000.00
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 #DateAmount
3January 31, 2021$5,000.00
2January 28, 20211,000.006,000.00
Adjusted Bank Balance as at January 31, 2021 (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, 2021 (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 #DateAmount
0
Subtotal0
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.)
Subtotal0
Adjusted Bank Balance as at January 31, 2021 (This amount should agree with the balance on the trust journal [Exhibit VI] at the end of the month.)$500.00

EXHIBIT VI

Trust Liability Reconciliation as at January 31, 2021

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 72(2) of the Real Estate Services 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 FundCommission Trust FundsComment
1$500.00Rep-A. Smith
4$10,000.00In pooled trust
5$5000.00In pooled Trust
6$20,000.00Term 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 PropertyDescriptionDate Deposit ReceivedDate Deposited to BankReceipt (pre-numbered)Amount
# 1Rental receiptJanuary 1, 2021January 2, 2021# 1$500.00
# 2Rental receiptJanuary 2, 2021January 3, 2021# 2$550.00
# 3Rental receiptJanuary 2, 2021January 3, 2021# 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 PropertyDescriptionDate Funds DisbursedDate Cleared BankCheque #Amount
# 1Hydro PaymentJanuary 10, 2021January 16, 2021# 1$100.00
# 1Management feeJanuary 15, 2021January 20, 2021# 2$50.00
# 1Net rent paid to ownerJanuary 15, 2021January 17, 2021# 3$350.00
# 2RepairJanuary 14, 2021February 2, 2021# 4$250.00
# 2Management feeJanuary 15, 2021January 20, 2021# 5$55.00
# 2Net rent paid to ownerJanuary 15, 2021January 16, 2021# 6$245.00
# 3Managemt feeJanuary 15, 2021January 18, 2021# 7$60.00
# 3Net rent paid to ownerJanuary 15, 2021February 2, 2021# 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.

DescriptionRental PropertyDateAmount ReceivedReceipt (Pre-numbered)Amount of Disb.ChequeTrust Balance
Balance Forward$275.00
Rental Receipt# 1January 1 2021$500.00# 1$775.00
Rental Receipt# 2January 2, 2021$550.00# 2$1,325.00
Rental Receipt# 3January 2, 2021$600.00# 3$1,925.00
Hydro Payment# 1January 10, 2021$100.00# 1$1,825.00
Repair Bill# 2January 14, 2021$250.00# 4$1,575.00
Net rent sent to owner# 1January 15, 2021$350.00# 3$1,225.00
Net rent sent to owner# 2January 15, 2021$245.00# 6$980.00
Net rent sent to owner#3January 15, 2021$540.00# 8$440.00
Management Fee Charged# 1January 15, 2021$50.00# 2$390.00
Management Fee Charged# 2January 15, 2021$55.00# 5$335.00
Management Fee Charged# 3January 15, 2021$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.

DescriptionDateReceiptTrust ReceiptChequeTrust DisbursementBalance
Rental Property # 1Carry forward$100.00
Rental receiptJanuary 1, 2021# 1$500.00$600.00
Hydro paymentJanuary 10, 2021# 1$100.00$500.00
Management feeJanuary 15, 2021# 2$50.00$450.00
Net rent paid to ownerJanuary 15, 2021# 3$350.00$100.00
DescriptionDateReceiptTrust ReceiptChequeTrust DisbursementBalance
Rental Property # 2Carry forward$75.00
Rental receiptJanuary 2, 2021# 2$550.00$625.00
Repair paymentJanuary 15, 2021# 4$250.00$375.00
Management feeJanuary 15, 2021# 5$55.00$320.00
Net rent paid to ownerJanuary 15, 2021# 6$245.00$75.00
DescriptionDateReceiptTrust ReceiptChequeTrust DisbursementBalance
Rental Property # 1Carry forward$100.00
Rental receiptJanuary 2, 2021# 3$600.00$700.00
Management feeJanuary 15, 2021# 7$60.00$640.00
Net rent paid to ownerJanuary 15, 2021# 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, 2021
DEF Rental Property Management Ltd.Trust Account (Rental Property Management)
Transaction Details
DateDescriptionAmounts debited from your account ($)Accounts credited to your account ($)Balance ($)
Business Current Account #45678Account type: POOLED RENTAL TRUST
Business name:DEF Rental Property Management Ltd.
January 1, 2021Opening Balance$275.00
Jan 2Deposit$500.00$775.00
Jan 3Deposit$550.00$1,325.00
Jan 3Deposit$600.00$1,925.00
Jan 16Cheque, NO. 001$100.00$1,825.00
Jan 16Cheque, NO. 006$245.00$1,580.00
Jan 17Cheque, NO. 003$350.00$1,230.00
Jan 18Cheque, NO. 007$60.00$1,170.00
Jan 20Cheque, NO. 002$50.00$1,120.00
Jan 20Cheque, NO. 005$55.00$1,065.00
Jan 31Closing 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 72(2) of the Real Estate Services 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, 2021(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 #DateAmount
4January 14, 2021$250.00
8January 15, 2021$540.00$790.00
Adjusted Balance Per Bank as at January 31, 2021 (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 77(2) of Real Estate Services Rules describes requirements where a brokerage holds or receives money on behalf of a strata corporation.

Strata Corp Operating Account ReferenceStrata UnitDescriptionDate Deposit ReceivedDate Deposited to BankReceipt (Pre-numbered)Amount
# LMS1123Strata Fee receiptJanuary 1, 2021January 2, 2021# 1$500.00
# LMS1456Strata Fee receiptJanuary 1, 2021January 2, 2021# 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 77(3) of the Real Estate Services 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 Coproration EFT Account ReferenceStrata UnitDescriptionDate Deposit ReceivedDate Transferred to Strata Operating AccountReceipt ReferenceDeposit AmountTransfer Amount
# LMS1Jan Strata Fee receiptsJanuary 2, 2021EFT1$1875.00
# LMS1506Strata Fee receiptJanuary 5, 2021www74$575.00
# LMS11112Strata Fee receiptJanuary 5, 2021www849$600.00
#LMS15556Strata Fee receiptJanuary 5, 2021www613$700.00

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

Section 62 of the Real Estate Services 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 ReferenceDescriptionDate Funds DisbursedDate Cleared BankCheque # RefAmount
# LMS1Hydro Utility paymentJanuary 10, 2021January 16, 2021# 101$100.00
# LMS1Strata Management feeJanuary 15, 2021January 20, 2021# 102$126.00
# LMS1Transfer to CRF — JanJanuary 31, 2021February 3, 2021Trf 123$50.00

Trust Funds Transferred to Contingency Reserve

Section 77(4) of the Real Estate Services 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 77(5) of the Real Estate Services 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 ReferenceDescriptionDate Funds TransferredDate Cleared BankTransfer Reference #Amount
# LMS1-CRFTransfer from Operating — JanJan 31, 2021Feb 3, 2021Trf 123$50.00

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

Section 77(6) of the Real Estate Services 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 OperatingStrata UnitDateAmount ReceivedReceipt ReferenceAmount of DisbursementCheque #Trust Balance
Balance ForwardNIL
Strata Fee Receipt# 123January 1, 2021$500.00$500.00
Strata Fee Receipt# 456January 2, 2021$550.00$1,050.00
Strata Fee Receipt# 506January 5, 2021$575.00$1,625.00
Strata Fee Receipt# 1112January 5, 2021$600.00$2,225.00
Strata Fee Receipt# 5556January 5, 2021$700$2,925.00
Hydro Utility PaymentJanJanuary 10, 2021$100.00101$2,825.00
Strata Management Fee ChargedJanJanuary 15, 2021$126.00102$2,699.00
Transfer to CRFJanJanuary 31, 2021$50.00Trf123$2,649.00
Description
LMS1-CRF
Strata UnitDateAmount ReceivedReceipt RefAmount of DisbursementCheque #Trust Balance
Balance Forward$10,000.00
Jan Transfer from Operation$50.00Trf 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, 2021
GHI Strata Management Inc.
In Trust for LMS1-Operating
DateDescriptionAmounts debited from your account ($)Amounts credited to your account ($)Balance ($)
Business Current Account #2468Account type: OPERATING STRATA TRUST
Business name:GHI Strata Management Inc. In Trust for LMS1-Operating
January 1, 2021Opening balance0.00
Jan 2Deposit$500.00$500.00
Jan 2Deposit$550.00$1,050.00
Jan 5www74$575.00$1,625.00
Jan 5www849$600.00$2,225.00
Jan 5www613700.00$2,925.00
Jan 16Cheque, NO. 101$100.00$2,825.00
Jan 20Cheque, NO. 102$126.00$2,699.00
January 31Closing totals$2,925.00$226.00$2,699.00
Bank of British Columbia
Account # 2468 -1
GHI Strata Management Inc.
In Trust For LMS1-CRF
DateDescriptionAmounts debited from your account ($)Accounts credited to your account ($)Balance ($)
Business Current Account #2468-1Account type; OPERATING STRATA TRUST
Business NameGHI Strata Management Inc. In Trust for LMS1-CRF
January 1, 2021Opening balance$10,000.00
January 31Closing totalsnilnil$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, 2021 (This balance is taken from the bank statement shown above.)$2,699.00
Add: Outstanding Deposits & Transfers (Note: Desposits 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 issue before the end of the month per the Trust Journal but which have not yet cleared the account should be entered here.)
Cheque/Transfer ReferenceDateAmount
Jan CRFJanuary 31, 2021$50.00
$50.00
Adjusted Balance Per Bank as at January 31, 2021 (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, 2021 (This balance is taken from the bank statement shown above.)$10,000.00
Add: Outstanding Deposits & Transfers (Note: Desposits 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 issue before the end of the month per the Trust Journal but which have not yet cleared the account should be entered here.)
Cheque/Transfer ReferenceDateAmount
nil
$0
Adjusted Balance Per Bank as at January 31, 2021 (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 Reference #Trust Funds
LMS1$2,649.00
LMS1-CRF$10,50.00
Total$12,699.00