What is a property management trust account?

A property manager who collects rent for owners is handling other people's money. Most states require that money to be kept in a trust (or escrow) account, separate from the manager's operating account, and many require security deposits to be held separately again.

Managers are usually expected to reconcile the trust account every month. A three-way reconciliation checks that three numbers agree: the adjusted bank balance, the trust account book balance, and the total of the individual owner and tenant ledgers.

Rules on trust accounts are set by state real estate or licensing law and vary widely, including who may sign, where the account may be held and how long records must be kept.