The California Department of Real Estate (DRE) has addressed frequent questions regarding who is authorized to sign on trust fund accounts managed by real estate brokers. The department clarified that, while the simple answer is “No,” there are more detailed rules outlined in state regulations.
According to DRE, all funds deposited by a broker into a trust fund account must remain there until they are disbursed by the broker according to instructions from the person entitled to those funds. For individual brokers, only the broker’s signature is permitted for withdrawals. In corporate settings, an officer—specifically the designated officer through whom the corporation is licensed—must be the signatory.
Other individuals may be authorized as signatories if given written permission by either the individual broker or designated officer. However, property owners generally do not fall within these guidelines and cannot be added as signatories under standard procedures.
The DRE emphasized that any arrangements made by brokers to add additional signatories do not absolve them of responsibility or liability in managing trust funds. Brokers have a fiduciary duty to handle and account for these funds properly and must maintain full control over them.
Whether a property owner can be added as a signatory depends on what services or duties the real estate broker will perform. If those duties require a real estate license and involve access to trust funds belonging to others, compliance with Business & Professions Code section 10145 and related record-keeping requirements is mandatory. Having both a broker and property owner as signatories on one general account does not satisfy these legal provisions.
The DRE advises brokers that strict adherence to trust fund record-keeping rules—including signature requirements—is essential for business success and public protection.
