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Audit Yourself: CTA Review Expectations

September 2023

Agency Reconciliation Review Expectations:

A clients' trust account review aims to bring your property management records into compliance with Oregon Revised Statute chapter 696 and applicable Oregon Administrative Rules (OAR). OAR 863-025-0010 to 863-025-0080 apply to the activities of a real estate property manager.

The goal of the Oregon Real Estate Agency is to encourage real estate property managers to comply with the statutes and rules through education and, if necessary, through the use of progressive discipline.

Review Your Records First:

The reconciliation review can take anywhere from a few weeks to a few months. You may expedite this process by ensuring your records meet Agency requirements before submitting them for review.

The following is a list of the most common non-compliance issues that you should correct before submitting records:

  • If someone other than yourself prepares, approves, or reviews your 3-way reconciliations and supporting documents, you must have written policies and a delegation of authority as described in OAR 863-025-0015.
  • The name of your clients' trust account must be labeled with “Clients' Trust Account" or “Client Trust Account" for accounts holding rents/owner funds, or “Clients' Trust Account-Security Deposits" or “Clients Trust Account SD" for accounts holding tenant funds. The clients' trust account name registered in eLicense must be used consistently on all records, including bank statements and checks, as described in OAR 863-025-0025.
  • As described in OAR 863-025-0040, a record of receipts and disbursements or check register must contain the following information:
  • For each receipt of funds:
    • The date the funds were received, unless the date is recorded in a separate document (see OAR 863-025-0040(3)).
    • The amount of the funds received.
    • The purpose of the funds and identity of the person who tendered the funds (Rent, late fee, security deposit, etc.).
    • The date the funds were deposited.
  • For each disbursement of funds:
    • The date the funds were disbursed.
    • The amount of funds disbursed.
    • The check number and payee of the disbursement.
    • The purpose of the disbursement (Utility, repair, owner payment, etc.).
  • A property manager may aggregate individual deposits or individual disbursements and record the aggregated total in the record of receipts and disbursements or check register only if the property manager maintains a separate report that details the individual deposits and disbursements. This report must be included in the reconciliation records submitted. 

Records Requested as Part of Review:

The reviewer will examine the following reconciliation records:

  • Clients' trust account 3-way reconciliations
  • Bank statements
  • Receipts and disbursements journal or check register
  • List of outstanding checks, withdrawals, transfers, and deposits
  • List of ledger balances
  • Copy of the Notice of Clients' Trust Account and Authorization to Examine form

As part of the review, the reviewer may request additional records, such as:

  • Supporting records/reports
  • Voided or canceled pre-numbered checks
  • Deposit slips
  • Wire transfer confirmations
  • Invoices or receipts
  • Property management agreements
  • Lease agreements

What to Expect During the Review*:

  1. You have 10 business days to submit the requested records.
  2. The reviewer will review all records requested.
  3. You will receive an email from the reviewer detailing the non-compliance issues discovered.
  4. You have up to 30 calendar days to correct all non-compliance issues found and provide proof of correction to the Agency.
  5. Depending on how you proceed, the reviewer may do one of the following:
    • Send an email informing you the review has been closed and no further action is required.
    • Send an email asking for more information or documentation.
    • Send an email asking for additional compliance.
    • Send an educational letter of advice (ELOA).
    • Refer the case to regulations for an investigation.

After a Reconciliation Review:

If non-compliance issues were discovered and corrected as part of the review, the Agency expects you to make the same corrections to all your active clients' trust accounts as needed. If the Agency finds similar non-compliance issues in a subsequent review of the same or another clients' trust account, your license may be at risk for disciplinary action or further sanction.

* If the reviewer believes you have misappropriated or mishandled client funds, they may close the review immediately and refer the case to the regulation division for investigation