Updated September 2026 · Reviewed by Adams, Cameron & Co.
Once a month, in writing, a broker must compare the brokerage's total trust liability against the reconciled bank balances of every trust account. The statement has a required minimum content list that includes the reconciliation date, the bank and account names and numbers, balances and dates, deposits in transit, outstanding checks identified by date and check number, and an itemized list of the trust liability. The broker must review, sign and date it. If the two sides do not agree, the reconciliation must itself explain the difference and record the corrective action taken.
- The reconciliation is monthly, written, and produced by the brokerage. A bank statement does not satisfy it.
- It compares trust liability, meaning all deposits received, pending and held, against reconciled bank balances.
- Nine categories of information are required as a minimum, including outstanding checks by date and check number.
- The broker must personally review, sign and date it. An unsigned reconciliation is a finding.
- Any shortage, overage, returned check or negative balance must have its cause and corrective action written on the statement.
Ask an agent what their broker does with escrow and you will usually get a shrug and the word bank. There is a written monthly obligation behind that shrug, it has a named list of contents, and a broker who is not doing it is carrying an exposure that eventually reaches everyone working there.
The monthly statement, and why it is not a bank statement
Once monthly, a broker must cause to be made a written statement comparing the broker's total liability with the reconciled bank balance of all trust accounts.
The two halves are different things, which is the entire point of the exercise. The bank balance is what the bank says is there. The trust liability is defined by the rule as the sum total of all deposits received, pending and being held by the broker at any point in time, in other words what the broker owes to other people out of that account. A reconciliation is the act of proving those two numbers are the same, in writing, every month.
This is not a bank statement, and a printed bank statement does not satisfy it. It is a document the broker produces.
What the statement has to contain
The rule sets a minimum list rather than leaving the format open. Each monthly statement-reconciliation must include, at minimum, the following.
| Required item | What it pins down |
|---|---|
| The date the reconciliation was undertaken | When the work was actually done |
| The date used to reconcile the balances | The as at date, which is not always the same day |
| The name of the bank or banks | Which institution holds the funds |
| The name and number of each account | Identifies the specific trust accounts |
| The account balance and date for each | The bank side of the comparison |
| Deposits in transit | Money sent but not yet showing |
| Outstanding checks, identified by date and check number | Money committed but not yet cleared |
| An itemized list of the broker's trust liability | The obligation side, deal by deal |
| Any other items needed to reconcile bank balances with the broker's checkbooks and trust account records, showing date of receipt and source of funds | The catch all that closes the gap |
Source: the Commission's rule on broker's records. Read at the date shown on this page.
And then the requirement that gets missed most often: the broker shall review, sign and date the monthly statement-reconciliation. A reconciliation prepared by a bookkeeper and never signed is an unsigned reconciliation, and that has been the finding in real disciplinary matters rather than a hypothetical.
When the numbers do not agree
The rule does not treat a mismatch as a failure to be hidden until it resolves. It treats it as something to be written down.
Whenever the trust liability and the bank balances do not agree, the reconciliation must contain a description or explanation for the differences and any corrective action taken in reference to shortages or overages.
The same applies to two specific events. Where a trust account record shows a service charge or a fee for a returned check with non sufficient funds, or where an account has a negative balance, the reconciliation must disclose the cause and the corrective action taken.
A shortage that is explained and corrected on the face of the monthly statement is an accounting event. The same shortage found later with no contemporaneous explanation is something else entirely.
What the broker must keep, and for how long
Separately from the monthly statement, a broker who receives a deposit must preserve and make available all deposit slips and statements of account from the depository, together with all agreements between the parties to the transaction, and must keep an accurate account of each deposit transaction and each separate bank account holding those funds.
All of those books and accounts are subject to inspection at all reasonable times during regular business hours. There is no notice requirement attached to that.
The retention period itself lives in the statute rather than in this rule, and runs to at least five years measured from a starting point that surprises people. That is covered in full in how long a brokerage must keep transaction records, and the deposit deadlines that feed the account are in how long a broker has to deposit earnest money.
Interest, and the written permission nobody remembers
A broker is allowed to place escrow funds in an interest-bearing account, which surprises agents who assume escrow must sit inert. The conditions are the interesting part.
Placing escrow money in an interest-bearing account, naming the party who is to receive the interest, and setting the time the earned interest must be disbursed, all require the written permission of every party to the transaction. Not the seller's agreement, not a line in the listing. All the parties, in writing. The account must also be an insured account in a depository located and doing business in Florida.
The mechanics afterwards are prescribed rather than left to the brokerage. To disburse principal and interest at the agreed time, the broker must first move both to a non-interest-bearing escrow account before disbursing. Where the broker is the party designated to receive the interest, only the principal moves to the non-interest-bearing account, and the interest goes directly to the broker's operating account.
There is an alternative route. The broker may open an individual interest-bearing escrow account for one specific transaction or sum, and on the agreed disbursement date close the account with checks issued to the appropriate people for principal and interest.
The reason this belongs on a page about monthly reconciliation is that interest arrangements are the most common source of a trust account that almost balances. A few dollars of interest sitting where nobody assigned it is precisely the kind of overage the monthly statement is designed to surface and explain.
Why this matters to you when it is not your job
None of the above is a sales associate's obligation. You will not be signing a reconciliation and you should not be preparing one. It still matters to you for three reasons.
It is a question you can ask. A broker who can describe their reconciliation without hesitating is telling you something real about how the firm is run. This is a fair thing to raise at an interview and a strange thing to be offended by.
Escrow failures are not quiet. When a trust account problem surfaces it does not stay inside the broker's office. It reaches the transactions in that account, which means it reaches the clients you introduced.
It is where enforcement starts. Failing to properly reconcile is the kind of finding that sits at the lower end of the enforcement ladder rather than the dramatic end, which is exactly why it is common. The difference between the tiers is set out in what a FREC citation is and how it differs from a complaint.
The honest summary is that a well run brokerage makes this completely invisible to its agents, and a badly run one makes it everybody's problem at once, usually without warning.
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