How do California real estate brokers reconcile their trust accounts?

California real estate brokers who hold rent, deposits, or earnest money in a trust account rec that account every month there is activity. Commissioner’s Regulation 2831.2 requires the sum of every beneficiary or property record to equal the control record of all receipts and disbursements, as of one cutoff, with a written rec of those balances.

This is the month-end job for a small property-management office on AppFolio, Rentvine or Buildium, often with QuickBooks Online on the side, that already has last month’s trust-account bank statement and the owner and tenant ledger exports. This is not legal advice. Check the current California Department of Real Estate rules and your CPA or counsel.

The two recs

DRE’s Trust Funds booklet (RE 13) writes two recs at month-end. Regulation 2831.2 requires that rec. DRE then tells brokers to compare both totals to the adjusted bank.

Number	What it is	What it proves
Adjusted bank balance	Statement ending balance, plus deposits in transit, minus outstanding checks	The cash is at the bank
Control record	Columnar record of every receipt and disbursement, with a daily running balance (Reg. 2831)	The books match that cash
Sum of separate records	Every beneficiary, transaction, or property ledger, each with its own running balance (Reg. 2831.1)	The cash is allocated to the right people

DRE’s October 6, 2026 update calls the 2831.2 rec a comparison of all separate records to the control-record balance on the same date. Any gap has to be corrected. The same update then says to compare those totals to the adjusted bank, and calls the bank rec indispensable. RE 13 says the bank rec is “not required by the Real Estate Law or the Commissioner’s Regulations” and is “an essential part of any good accounting system.” DRE’s October 2024 bulletin still tells brokers to rec the control record to the bank statement as of a cutoff, usually month-end.

What is a three-way reconciliation is the definition. How to do a three-way trust account reconciliation is the packet.

One trust account, cutoff the statement date. The amounts are an illustration.

Item	Amount
Bank statement ending balance	$18,640.00
Plus deposits in transit	$2,100.00
Minus outstanding owner-draw checks	($1,240.00)
Adjusted bank balance	$19,500.00

The control record on that cutoff is $19,500.00.

Ledger	Amount
Owner A, 12 Pine	$6,200.00
Owner B, 44 Elm	$4,800.00
Owner C, 8 Oak	$3,100.00
Tenant security deposits	$5,200.00
Broker funds for bank charges	$200.00
Sum of separate records	$19,500.00

Those three match before the rec is done. A deposit in transit is a valid reconciling item. Hold it out of owner draws until it clears. Regulation 2835 lets a broker keep up to $200 of firm money in the trust account for bank charges, on its own record.

How to run them

RE 13 walks the same steps. Use the statement ending date as the cutoff, and run every report to that date. The usual miss is a statement through the 30th and an owner-ledger export generated on the 2nd.

1. Post through the cutoff. Record every receipt and disbursement on the control record and on the matching beneficiary or property record. Business and Professions Code §10145 is the trust-fund statute. Regulation 2832 puts rent, deposits, and other trust money into the trust bank, a neutral escrow, or the owner’s hands within three business days.

2. Adjust the bank. Start with the statement ending balance. Add deposits you recorded that the bank has not credited. Subtract checks and ACH owner draws that have not cleared. RE 13 warns brokers who calculate the adjusted bank from the statement alone.

3. Add the separate records. Export every owner, tenant-deposit, and broker-buffer balance as of that same cutoff. For property management, DRE’s RE 4525 is the separate record for each property managed, used in place of the per-transaction RE 4523. The control record is RE 4522. GAAP software satisfies 2831 and 2831.1 if the ledgers can be rec’d under 2831.2. Each trust bank gets its own set of records.

4. Tie the two books, then the bank. The sum of the separate records has to equal the control record. Then both have to equal the adjusted bank. RE 13’s usual causes for a gap are a transaction never recorded, a wrong figure, a bad running balance, a missing beneficiary record, or a bank error.

5. Refuse a negative ledger. RE 13 tells brokers to disburse from a beneficiary’s record only when that record stays whole. Negative balances are left out of the aggregate liability, so a positive bank can still hide a shortage to everyone else. Regulation 2832.1 requires written consent from every owner of funds in the account before a disbursement that would drop the bank below that aggregate liability. Do not send owner draws until the three numbers agree and no owner ledger is negative.

On r/appfolio in July 2026, a mid-year write-up treated a rec that is a month or two behind as common, and said a negative owner balance is the line an auditor circles first even when the trust still has cash.

What the rec record has to show

Keep, for each month with activity, a record of the 2831.2 rec. The regulation names what it has to identify.

On the worksheet	Why it is there
Bank account name and number	Which trust bank
Date of the reconciliation	The cutoff
Name or account number of each principal, beneficiary, or transaction	Whose money
The broker’s trust-fund liability to each	The separate-record balances

File it with the statement, the outstanding-check list, and the ledgers. Business and Professions Code §10148 keeps trust records, canceled checks, and related documents for three years after closing, or after the listing if the deal never closed.

Sweep earned management fees out of trust within 25 days of deposit when broker and owner funds landed together (Reg. 2835). Leave them longer and the trust holds firm cash.

An unexplained overage, cash in the account with no name on it, stays in trust on its own subsidiary ledger. RE 13 says it cannot offset a shortage somewhere else, and it gets rec’d monthly like every other beneficiary. Why doesn’t my trust account bank balance match the owner ledgers is the diagnostic when those lists disagree.

Who runs it, and who still owns it

A bookkeeper can tick the outstanding items and build the worksheet. The broker or designated officer still owns the records. DRE’s October 6, 2026 update says that remains true after hiring a bookkeeper.

Regulation 2834 limits who may withdraw: the broker, a salesperson licensed to that broker, another broker under a written agreement, or an unlicensed employee bonded for the trust funds they can reach. Adding a signer does not take the broker off the hook. Have the bank statement delivered to the broker first.

DRE’s October 2024 bulletin tells brokers to put the monthly rec in the office policy manual under Regulation 2725.

What the software already does

AppFolio, Rentvine and Buildium win the built-in trust rec. They keep owner and tenant ledgers in the same system as the bank rec. On their own books, that rec works. QuickBooks Online wins the two-way rec the CPA already knows.

Job	AppFolio, Rentvine or Buildium	QuickBooks Online
Two-way bank rec	Yes	Yes, native, until Difference is $0.00
Sum of owner and tenant ledgers	Yes, that is the product	No. Bank vs register only
Monthly worksheet of all three	The in-app rec, if you run it	You still export and add the ledgers
Negative owner ledger	Visible on the owner balance report	No floor on a class

AppFolio (June 16, 2026) calls this a Triple Tie Out of owners, banks, and the general ledger, monthly. Rentvine (read 2026-11-03) describes a 3-way tie of bank statement, trust ledger, and property ledgers. Buildium (December 8, 2025) writes the same three totals.

Intuit’s QuickBooks Online reconcile help (updated 2026-08-05) is the two-way job: match the register to the statement until the Difference is $0.00. How to reconcile a property management trust account in QuickBooks Online is that click path. Finish it, then still add the ledgers.

Someone still has to pick the cutoff, refuse a negative draw, and file the 2831.2 worksheet. Parking a $40 gap on a clearing ledger because it will catch up is how last year’s miss is still on this year’s rec.

What DRE has found

From July 1, 2023 through June 30, 2024, DRE’s Audits Division completed 361 audits. About 57 percent found recordkeeping violations. About 32 percent found trust-account shortages totaling about $3.5 million (October 2024 bulletin). DRE’s August 26, 2025 advisory lists trust-fund handling and record-keeping, including failing to rec, as the most common violation.

The October 6, 2026 update adds a current finding: brokers using suspense or clearing ledgers to hold unknown differences. Those ledgers will likely produce a discrepancy or recordkeeping violation. Rules vary by state. Check your commission and CPA.

Pull last month’s trust-account bank statement, the control-record or general-ledger export, and every owner and tenant ledger as of the statement date. Add the ledgers, adjust the bank, and file the worksheet that lists each beneficiary’s balance. Those exports and the statement are already in last month’s close folder.