Trust Accounting Services
Trust Accounting That Holds Up When Someone Asks to See It
Trust accounting is the one part of property management bookkeeping where being close is not the same as being right. REA keeps tenant, owner, and security deposit money separated, tied out, and documented inside the software you already run.
We work as your property accounting team across AppFolio, Yardi, Buildium, Rent Manager, Entrata, MRI, and QuickBooks, on residential portfolios, commercial assets, and community associations.
The three-way tie-out
Trust Account · Month End
Bank statement balance
$1,284,306.11
Book (ledger) balance
$1,284,306.11
Sum of all beneficiary ledgers
$1,284,306.11
Two out of three is not a reconciliation. Illustrative figures.
The Standard Is Not “Balanced.” It Is Balanced Three Ways.
What Real Estate Trust Accounting Requires
A normal bank reconciliation asks one question: does the bank agree with the books? A trust account has to answer a harder one. The bank has to agree with the books, and the books have to agree with the sum of every individual owner and tenant ledger inside the account. If the first two match and the third does not, the account is holding the right amount of money on behalf of the wrong people.
That third leg is where trust accounting is won or lost, and it is the leg most often skipped, because software will happily show a clean bank reconciliation while a handful of owner ledgers sit negative underneath it.
01
The bank
The cleared balance on the trust account statement, as the bank reports it.
02
The book
What your property management software says the trust account holds after every posted receipt, payment, and transfer.
03
The beneficiaries
Every owner balance and every tenant deposit added together. This is the number that proves whose money is in the account.
Four Ways a Trust Account Goes Wrong
And Why None of Them Look Wrong at First
Trust problems are rarely dramatic. They are small, reasonable decisions that compound quietly until an audit, an owner departure, or a deposit dispute forces someone to reconstruct months of history under time pressure.
- 01
Commingling by convenience
A management fee taken before it is earned, or an operating expense paid out of the trust account because that is where the cash was. It is almost never malicious and it is the single most common finding in a trust exam.
- 02
Owner ledgers that go negative
One owner's cash quietly covering another owner's expense. In total the account balances, so a monthly bank reconciliation looks clean. At the ledger level, one client is funding another.
- 03
Deposits held against the wrong lease
A security deposit applied to the property instead of the tenant, or carried forward after a move-out. It surfaces at disposition, when the tenant asks for money back and the ledger cannot say how much is theirs.
- 04
Reconciliation as a formality
The account is reconciled every month, but variances are carried forward instead of chased. After a year the reconciliation report is a document that proves the difference exists rather than one that resolves it.
What REA Handles
Trust Accounting Services, Month After Month
We take the trust function end to end, or we take the part you cannot staff. Either way the work happens inside your software, on your chart of accounts, on a fixed monthly calendar you can plan around.
Schedule a Call- Separate trust and operating accounts, kept separate
- Per-property and per-tenant ledger maintenance
- Security deposit tracking from move-in through disposition
- Owner funds held, applied, and distributed on schedule
- Three-way reconciliation of every trust account
- Negative owner and tenant balance monitoring
- Trust-to-operating transfers for earned management fees
- Documentation and reports formatted for a state examination
Broker Trust Accounts and State Rules
If you hold a real estate license, the trust account is not just an accounting obligation, it is a licensing one. States set their own rules on how fast funds must be deposited, whether deposit interest belongs to the tenant, how long records must be kept, and how frequently reconciliation must be performed and evidenced.
We keep your reconciliations on the cadence your state expects and retain the supporting documentation in a form an examiner will accept, so a records request is a retrieval task rather than a reconstruction project.
- Reconciliation performed and dated on a fixed monthly cadence
- Supporting bank statements and ledger detail retained together
- Deposit handling matched to the rules of the state the property sits in
- A clean audit trail for every trust-to-operating transfer
Frequently Asked Questions
What is trust accounting in property management?
Trust accounting is the practice of holding and tracking money that belongs to someone else. Rent you collect belongs to the owner until you remit it. A security deposit belongs to the tenant until the lease ends. Because that money is not yours, most states require it to sit in a separate trust or escrow account, never commingled with your operating funds, with a per-property and per-tenant ledger showing exactly whose money is whose at any moment.
How is trust accounting different from regular bookkeeping?
Regular bookkeeping has to be accurate. Trust accounting has to be accurate and provable at the beneficiary level. A normal set of books can be right in total. A trust account has to be right in total and right for every individual owner and tenant inside it, and it has to reconcile three ways: the bank, the book balance, and the sum of the individual ledgers.
What happens if a trust account is out of balance?
It depends on the direction and the state. A shortage means client money has been spent on something it should not have been, which regulators treat as the serious version of the problem and which can put a broker license at risk. An overage usually means unidentified funds or a posting error. Either way the fix is the same: find the transaction that caused it rather than plugging the difference, because a plugged trust account fails the next audit it meets.
Do you handle broker trust accounts and state-specific requirements?
Yes. Trust rules are set state by state, and they differ on the details that matter: how quickly deposits must be placed, whether interest belongs to the tenant, how long records must be retained, and how often reconciliation must be performed and signed off. We work to the requirements of the states your properties sit in and keep the documentation those states expect.
Can you fix a trust account that has not been reconciled in months?
That is a common starting point. We run a diagnostic first to find out how far back the account last tied out, then work forward correcting misapplied receipts, unposted deposits, and transfers that crossed between trust and operating. You get a written record of what was wrong and what changed, which is the document you want on hand if the account is ever examined.
Which software do you work in?
Yours. We take accountant access to AppFolio, Yardi, Buildium, Rent Manager, Entrata, RealPage, MRI, or QuickBooks and perform the work inside the system you already run, so your trust ledgers, owner statements, and reporting all stay in one place.
Where This Fits
Trust accounting is rarely bought alone. It sits next to the reconciliation work that proves it, the payables and receivables that move the money, and the software your ledgers live in.
Experts In All Property Types
Residential, commercial and everything in between. The asset class changes what the books have to prove, and our teams are staffed accordingly.
- Single-Family
- Multifamily
- Student Housing
- Affordable Housing
- Community AssociationsSee the page
- CommercialSee the page
Check Out What Our Clients Have To Say About Us
Property Managers, Investors & Owner Operators
Came from a bookkeeper who did not know real estate
Following a series of erroneous financials from my previous bookkeeper, who lacked expertise in real estate, it's been truly remarkable to receive not only accurate financials on a consistent basis but also proactive advice without prompting. The REA team is a game-changer in real estate accounting!
Real-estate-only specialists
As REA exclusively specializes in Real Estate, I rest easy knowing my financials are precise every month while saving money at the same time, an invaluable benefit.
Handed over the whole accounting function
I highly recommend Real Estate Accounting (REA) services from this group. They truly are great and have helped us tremendously at a time we needed it the most. I felt very comfortable giving up all my accounting responsibilities to this team and I'm still glad I made the decision to work with this group. Nothing less than an amazing experience!
Day-to-day financial operations
REA and team have been nothing but excellent helping our firm with its day to day financial needs. Their expertise, professionalism, and timeliness have made our lives so much easier. We foresee a long relationship with REA and team.
Onboarding and responsiveness
Real Estate Accounting truly is a special company. They helped as if they were a part of our company, with the concern and caution as an employee would have, but even more. They quickly ascertained our needs and developed an effective team to help with our accounting needs. They were extremely responsive and always accurate. I would recommend their services to anyone who needs help with their property management accounting.
Smaller portfolio, still looked after
Adam the owner took a personal interest in my situation and was willing to work with me to see if his company was a good fit. I may be too small for them but I would highly recommend them to anyone considering a bookkeeper for their property management business.
230+
Property Accountants
30M+
Commercial Sq. Ft.
Up to 50%
Saved vs In-House
Every month
On-Time Close
Get Your Trust Accounts Tied Out
Schedule a call and we will walk your current trust setup, tell you honestly whether it reconciles three ways today, and scope what it takes to keep it that way every month.