The California Department of Real Estate (DRE) has addressed common questions regarding signatories on trust fund accounts, clarifying the responsibilities and requirements for real estate brokers.
According to DRE, while property owners often inquire about being added as signatories to trust fund accounts, the regulations do not generally permit this. The relevant code specifies that “all funds deposited by the broker in a trust fund account shall be maintained there until disbursed by the broker in accordance with instructions from the person entitled to the funds.” For individual brokers, only their signature is authorized for withdrawals. In corporate brokerage settings, an officer—specifically the designated officer through whom the corporation is licensed—is required to sign.
Withdrawals can also be made by other individuals if they are explicitly authorized in writing by either the individual broker or designated officer. However, property owners are typically not included among those who may be granted such authority.
The DRE emphasizes that delegating signing authority does not absolve brokers of responsibility or liability regarding trust funds under their control. Once a broker receives trust funds, they hold a fiduciary duty to manage and account for these funds properly and must remain fully responsible for them.
Additionally, compliance with Business & Professions Code section 10145 is mandatory when a broker’s work involves access to beneficiary trust funds. Having both a real estate broker and property owner as co-signatories on a general account does not satisfy these legal provisions.
The department advises brokers to proactively follow all record keeping requirements related to trust fund management and signatures. This approach helps protect both their business interests and public welfare.
