Nuu-chah-nulth territory. Photo: Kyler Vos
Real Estate Trust Accounts
Important information for real estate brokers in BC.
Since 1985, the Real Estate Foundation of BC has received the interest that accrues on pooled brokerage trust accounts. REFBC invests this money and provides grants to projects that advance sustainability, equity, and social justice in relation to land use and real estate practices in BC.
This page provides an authorization form for brokerages, overviews of REFBC’s agreements with financial institutions and the legislation that governs the Foundation, and answers to frequently asked questions.
If you have questions about setting up a pooled trust account, please contact Christian Hansen, Director of Investments and Banking, by email or by phone (604-343-2627).
For further information on trust accounts, please refer to the BC Financial Services Authority’s Trust Accounts Guidelines or directly to the Real Estate Services Act.
Setting Up a Pooled Trust Account
Brokerages will need to complete and submit a copy of the REFBC Authorization Form when:
- Opening a new pooled trust account
- Changing financial institutions
The form authorizes your financial institution to pay interest to the Foundation, according to the current compensation agreement.
Email completed forms to info@refbc.ca or fax them to 604-688-3669.
Agreements With Financial Institutions
REFBC has compensation agreements in place with every major bank and credit union in BC. These agreements cover the calculation and payment of interest on pooled trust accounts, as well as the service and transaction fees that are deducted before payment to the Foundation.
The Foundation is not responsible for bank charges where the transaction fees exceed the interest accrued or for other fees such as certified cheques, statement preparation, or audit confirmation.
Legal Background
Today, the Real Estate Services Act is the legislation that governs real estate brokerages, the Real Estate Foundation of BC, and more. The Real Estate Services Act was enacted in 2005, replacing the Real Estate Act and parts of the Real Estate Development Marketing Act. Additional rules are spelled out in the Real Estate Services Regulation.
Prior to the formation of REFBC in 1985, all interest generated from brokers’ trust accounts went to the financial institutions. All service charges paid on these trust accounts were borne by the brokers. Because of the brokers’ position as trustee of these funds, they were prohibited from earning any interest on their trust accounts. In essence, this was lost money.
The Law Foundation of BC and the Notary Foundation of BC have similar funding mechanisms, as does the Alberta Real Estate Foundation.
Pursuant to the Real Estate Services Act:
- Section 26(1): A brokerage must maintain, in accordance with the rules, one or more interest-bearing trust accounts with one or more savings institutions in BC.
- Section 29(1): A brokerage that is credited by a savings institution with interest on money held in a brokerage trust account (a) holds the interest in trust for the Foundation, and (b) must cause the savings institution to pay the interest to the Foundation in accordance with the regulations.
$100M+
granted to projects since 1988
$6.8M
granted to 80+ projects in 2022-23
$3.1M
invested in funds for environmental
and social impact
Questions & Answers
What about security and pet deposits?
Security and pet deposits held under the Residential Tenancy Act, where the broker is required to pay a regulated interest rate, are not subject to Section 29 of the Real Estate Services Act. To keep these funds from being subject to Section 29, a brokerage must maintain a separate pooled trust account for security and pet deposits only.
When security and pet deposits are deposited into the broker’s general pooled trust account (an account containing any other type of deposit outside of security and pet deposits), those monies then become subject to the requirement to remit interest to the Real Estate Foundation of BC. We strongly advise brokerages holding money for security and pet deposits to ensure these funds are not held in the broker’s general pooled trust account.
What about flow-through accounts?
A pooled trust account may be used by a brokerage for either electronic deposits and/or payments. Although the Council Rules require that the brokerage maintain separate trust accounts for each strata corporation, pooled trust accounts are permitted for the electronic collection of strata fees and payment of invoices on behalf of strata corporations. These pooled trust accounts are referred to as “flow-through” accounts.
Pooled trust accounts being used as flow-through accounts are subject to Section 29 of the Real Estate Services Act and a financial institution must be directed to pay any interest on the flow-through account to the Real Estate Foundation of BC.
“With the Real Estate Foundation of BC’s generous support, this program has helped us take more purposeful action to expand our profession’s appreciation for diversity, identify opportunities to bridge any understanding gaps that may exist, and foster open dialogue with members and experts in this field.”
— Jeff King, CEO, Real Estate Board of Greater Vancouver