Kansas Statutes 58-3061. Trust accounts
(a) 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 Kan. Stat. Ann. § 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.
(b) 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.
Terms Used In Kansas Statutes 58-3061
- Act: means the real estate brokers' and salespersons' license act. See Kansas Statutes 58-3035
- Associate broker: means an individual who has a broker's license and who is employed by another broker or is associated with another broker as an independent contractor and participates in any activity described in subsection (f). See Kansas Statutes 58-3035
- Branch broker: means an individual who has a broker's license and who has been designated to supervise a branch office and the activities of salespersons and associate brokers assigned to the branch office. See Kansas Statutes 58-3035
- Branch office: means a place of business other than the principal place of business of a broker. See Kansas Statutes 58-3035
- Broker: means an individual, other than a salesperson, who advertises or represents that such individual engages in the business of buying, selling, exchanging or leasing real estate or who, for compensation, engages in any of the following activities as an employee of, or on behalf of, the owner, purchaser, lessor or lessee of real estate:
(1) Sells, exchanges, purchases or leases real estate. See Kansas Statutes 58-3035
- Commission: means the Kansas real estate commission. See Kansas Statutes 58-3035
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- Interest: means : (1) Having any type of ownership in the real estate involved in the transaction; or (2) an officer, member, partner or shareholder of any entity that owns such real estate excluding an ownership interest of less than 5% in a publicly traded entity. See Kansas Statutes 58-3035
- Office: means any permanent location where one or more licensees regularly conduct real estate business as described in subsection (f) or a location that is held out as an office. See Kansas Statutes 58-3035
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Property: includes personal and real property. See Kansas Statutes 77-201
- Real estate: means any interest or estate in land, including any leasehold or condominium, whether corporeal, incorporeal, freehold or nonfreehold and whether the real estate is situated in this state or elsewhere, but does not include oil and gas leases, royalties and other mineral interests, and rights of way and easements acquired for the purpose of constructing roadways, pipelines, conduits, wires and facilities related to these types of improvement projects for private and public utilities, municipalities, federal and state governments, or any political subdivision. See Kansas Statutes 58-3035
- State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See Kansas Statutes 77-201
- Supervising broker: means an individual, other than a branch broker, who has a broker's license and who has been designated as the broker who is responsible for the supervision of the primary office of a broker and the activities of salespersons and associate brokers who are assigned to such office and all of whom are licensed pursuant to subsection (b) of Kan. See Kansas Statutes 58-3035
- Trust account: A general term that covers all types of accounts in a trust department, such as estates, guardianships, and agencies. Source: OCC
(c) 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.
(d) 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.
(e) 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.
(f) The requirement of maintaining a trust account shall not apply to: (A) A broker whose license is on deactivated status; (B) a broker who acts as an associate broker; (C) 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 (D) a broker whose real estate activities, in the opinion of the commission, do not necessitate the holding of trust funds.
(g) Upon acceptance of an offer and deposit of earnest money in a broker’s trust account, such deposit may be disbursed only:
(1) Pursuant to written authorization of buyer and seller;
(2) pursuant to a court order; or
(3) when a transaction is closed according to the agreement of the parties.
(h) 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.”
(i) 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 Kan. Stat. Ann. § 58-3023, and amendments thereto, upon the following determinations having been made by the commission:
(1) That the money has been in the broker’s trust account for five or more years;
(2) 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
(3) that the funds do not meet the criteria for payment to the state treasurer under the disposition of unclaimed property act.