For a brokerage, the trust account is where consumer protection becomes a daily operational discipline. It holds money that belongs to other people — buyers, sellers, and the parties to a transaction — and the rules governing it are among the strictest obligations a brokerage carries under Ontario law. They're also under sharper scrutiny than ever: with a new annual financial filing taking effect in 2026 and monthly trust reconciliation reporting on the horizon, the Real Estate Council of Ontario (RECO) is moving toward a far more proactive model of financial oversight. This guide lays out what the rules actually require, where brokerages get tripped up, and what's changing.
This is general information for Ontario brokerages, not legal or accounting advice. For binding requirements, rely on TRESA, its regulations, and RECO's guidance.
What Is a Real Estate Trust Account?
A real estate trust account (sometimes called a RETA) is a designated bank account a brokerage uses to hold money it receives in trust for other people in the course of trading in real estate. The defining principle is separation: trust money is not the brokerage's money, and it must be kept entirely apart from the brokerage's own operating funds.
The framework comes from the Trust in Real Estate Services Act, 2002 (TRESA) — the legislation that replaced REBBA on December 1, 2023 — and its regulations, principally O. Reg. 567/05 (General) and O. Reg. 579/05 (records and other matters). Section 27 of the Act requires a brokerage to maintain a properly designated trust account at a recognized financial institution, deposit all trust money into it, keep that money separate from the brokerage's own funds, and disburse it only in accordance with the terms of the trust. RECO administers and enforces these requirements.
What Money Must Be Held in Trust
In practice, the trust account holds the funds that flow through a transaction on behalf of others — most commonly deposits, money needed to complete a transaction, and amounts to be disbursed under the terms of the trust, including commissions where authorized.
The critical point RECO has emphasized is purpose. Trust funds may be held and used only for their designated purposes. They are not available for the brokerage's operating expenses, cash flow, investments, or any other use the law doesn't expressly permit. Any deviation — intentional or not — is treated as a serious contravention of TRESA, because it puts consumer money at risk and undermines confidence in the entire transaction process.
The Five-Business-Day Deposit Rule
When money comes into a brokerage's hands in trust, the clock starts. Under O. Reg. 567/05, the brokerage must deposit that money into its trust account within five business days of receipt. Business days exclude weekends and statutory holidays, so the timeline can stretch over a calendar week — but the obligation is firm, and late deposits are a common and avoidable compliance failure.
Two related rules shape how the money moves after that:
- Disbursement follows the trust. Money can only be paid out in accordance with the terms of the applicable trust, and when a disbursement is required under those terms, it must be made as soon as practicable.
- The broker of record authorizes transactions. No transaction involving trust money may take place unless it is authorized by the brokerage's broker of record — making the broker of record personally central to trust account integrity.
Monthly Trust Account Reconciliation
Reconciliation is where trust account discipline is proven on paper. Under O. Reg. 579/05, a brokerage must prepare a reconciliation statement for each trust account. For a brokerage that receives a monthly statement from its financial institution, that reconciliation must be completed within 30 days of the date the monthly statement is received.
A compliant reconciliation does two things: it identifies any differences between the brokerage's records and the financial institution's records as of the statement date, and it identifies the balances in the trust account owing to each person. The broker of record must then review, sign, and date the reconciliation within that same window. RECO provides a sample reconciliation template for brokerages that don't use formal accounting software, but the underlying obligation — and the broker of record's monthly review and sign-off — is non-negotiable.
Interest, Unclaimed Funds, and Shortfalls
A few additional obligations round out trust account management:
- Interest. Where money is held in an interest-bearing trust account, the brokerage must, on request, inform a person for whom money is held of the current interest rate.
- Unclaimed money. If a brokerage holds trust money for two years and entitlement to it remains undetermined or unclear, the brokerage must pay the money — together with any accrued interest — to RECO, along with the supporting documentation for the transaction.
- Shortfalls. A shortfall or missing property in a trust account is a reportable event, not an internal matter to quietly correct. RECO's bulletins set out the obligations for identifying and reporting these.
Behind all of this sits RECO's consumer deposit insurance program, which is designed to respond to rare events such as brokerage theft, fraud, insolvency, or misappropriation of trust funds — a backstop that exists precisely because trust money matters so much.
What's Changing: RECO's New Financial Oversight
Recent high-profile trust account failures have pushed RECO toward a more proactive, data-driven approach, and two changes will reshape how brokerages demonstrate compliance:
- Annual financial filing — effective October 1, 2026. Every registered brokerage in Ontario must submit an annual financial filing through RECO's MyWeb portal. The filing includes information from the brokerage's financial statements, details on trust assets and liabilities, data on unclaimed trust monies, and a compliance attestation from the broker of record. Brokerages with fiscal year-ends between August 1, 2025 and July 31, 2026 face an initial deadline of October 30, 2026; those with fiscal year-ends on or after August 1, 2026 must file within 90 days of their year-end.
- Monthly trust reconciliation reporting — planned for 2027. RECO has signalled that a second phase will introduce monthly trust reconciliation reporting, initially targeted at higher-risk brokerages rather than applied industry-wide.
The takeaway for brokerages: trust account practices that were only inspected periodically will increasingly be reported, attested to, and analyzed. Clean, current, well-documented reconciliation is becoming a reporting requirement, not just an internal best practice.
Where Brokerages Get Tripped Up
Most trust account problems aren't dramatic — they're operational. The recurring ones are worth watching for: depositing trust money past the five-business-day window; commingling trust and operating funds; ever touching trust money for operating costs; completing reconciliations late or skipping the broker of record's review and sign-off; weak record retention; and failing to remit unclaimed funds to RECO after the two-year mark. Each is preventable with consistent process and clear ownership of the task.
Make Trust Compliance One Less Thing to Manage
Trust accounting rewards consistency — accurate deposits, clean monthly reconciliations, a broker of record who reviews and signs on time, and records that are ready the moment RECO asks. That's exactly the kind of disciplined, repeatable work myAbode has handled for Ontario brokerages for nearly two decades. As a managed extension of your brokerage — not another vendor — we take on deals processing and audit compliance so your trust account is always current, reconciled, and filing-ready, and your broker of record can sign with confidence. As RECO's new financial filing and reconciliation requirements take hold, that's one less thing for your brokerage to carry alone. Talk to myAbode about how we support your back office.
Frequently Asked Questions
