58-3061. Trust accounts.
- Unless exempt under subsection (f), each broker shall maintain,
in the broker's name or the broker's firm name, a separate trust account
in this state, or in an adjoining state with written permission of
the Commission, designated as such. All down payments, earnest money
deposits, advance listing fees or other trust funds received in a
real estate transaction by the broker or by the broker's associate
brokers or salespersons on behalf of a principal or any other person
shall be deposited or invested in such account unless all parties
having an interest in the funds have agreed otherwise in writing.
The account shall be with an insured bank or savings and loan association
or credit union which is insured with an insurer or guarantee corporation
as required under K.S.A. 17-2246 and amendments thereto. A broker
shall not retain any interest accrued on moneys held in an interest-bearing
trust account without the written consent of all parties to the transaction.
- Each broker shall notify the Commission of the name of the bank,
credit union or savings and loan association in which the trust account
is maintained and of the account name by completing a consent to audit
form obtained from the Commission. A broker may maintain more than
one trust account if the Commission is advised of each such account
as required by this subsection and authorized to examine all such
accounts. If a separate trust account is maintained for a branch office,
the branch broker shall maintain trust account records required by
rules and regulations of the Commission and all transaction files
related to the branch office trust account.
- Each broker shall grant full access to all records pertaining to
the broker's trust account to the Commission and its duly authorized
representatives. A trust account examination shall be made at such
time as the Commission directs.
- No payments shall be made from the broker's trust account other
than a withdrawal of earned commissions payable to the broker or distributions
made on behalf of the beneficiaries of the trust account. A broker
shall not be entitled to any part of the earnest money or other money
paid to the broker in connection with any real estate transaction
as part or all of the broker's commission or fee until the transaction
has been consummated or terminated unless otherwise agreed in writing
by all parties to the transaction.
- A broker shall make available, for inspection by the Commission
and its duly authorized representatives, all records relating to the
broker's real estate business. Such records shall be kept in a form
and for a term prescribed by the Commission. An inspection shall be
made at such time as the Commission directs.
- The requirement of maintaining a trust account shall not apply
- A broker whose license is on deactivated status;
- a broker who acts as an associate broker;
- a broker who is an officer, member, partner, shareholder or
employee of an association, corporation, limited liability company,
limited liability partnership, partnership or professional corporation
and who is not the supervising broker of an office of the association,
corporation, limited liability company, limited liability partnership,
partnership or professional corporation; or
- a broker whose real estate activities, in the opinion of the
Commission, do not necessitate the holding of trust funds.
- Upon acceptance of an offer and deposit of earnest money in a broker's
trust account, such deposit may be disbursed only:
- Pursuant to written authorization of buyer and seller;
- pursuant to a court order; or
- when a transaction is closed according to the agreement of
- Nothing in this section shall prohibit the parties to a real estate
contract from agreeing, in the sales contract, to the following procedure:
"Notwithstanding any other terms of this contract providing for
forfeiture or refund of the earnest money deposit, the parties understand
that applicable Kansas real estate laws prohibit the escrow agent
from distributing the earnest money, once deposited, without the consent
of all parties to this agreement. Buyer and seller agree that failure
by either to respond in writing to a certified letter from broker
within seven days of receipt thereof or failure to make written demand
for return or forfeiture of an earnest money deposit within 30 days
of notice of cancellation of this agreement shall constitute consent
to distribution of the earnest money as suggested in any such certified
letter or as demanded by the other party hereto."
- The Commission may direct a broker to remit moneys from the broker's
trust account to the Commission for deposit into the real estate recovery
revolving fund established within the state treasury by K.S.A. 58-3023
and amendments thereto, upon the following determinations having been
made by the Commission:
- That the money has been in the broker's trust account for five
or more years;
- if the money was an earnest money deposit, that an earnest
money dispute existed or the broker did not obtain written authorization
of buyer and seller to disburse the funds; and
- that the funds do not meet the criteria for payment to the
state treasurer under the disposition of unclaimed property act.
(History: L. 1980, ch. 164, § 28; L. 1983, ch. 76, § 7;
L. 1986, ch. 209, § 13; L. 1991, ch. 163, § 4; L. 2010, ch.
104, § 9; July 1.)