Compliance Reviews

Commission staff conduct compliance reviews to examine real estate brokerage transaction records including trust accounts. Commission staff conduct these reviews by e-mail and occasionally onsite visits.

Exams are conducted to determine if trust funds in real estate transactions are properly handled. Examiners also review contracts and other documents in the transaction files to monitor compliance with law and regulations.


K.A.R. 86-3-10
All records relating to the broker's real estate business are to be retained in the broker's files for three years.

K.A.R. 86-3-22
Transaction numbers are to be assigned and placed on all applicable records in the form mandated by this regulation.

K.A.R. 86-3-18
If the broker maintains a trust account, a complete record of all monies received or escrowed on real estate transactions must be maintained.

Transaction Files

Each transaction file, whether PENDING, CLOSED or CANCELLED, should contain all the following records (IF APPLICABLE) to the transaction:

  • Agency Agreement with Seller
  • Agency Agreement with Buyer
  • Transaction Broker Agreement
  • Transaction Broker Addendum
  • Offers and Counteroffers
  • Contract
  • Lot Reservation Agreement
  • Commercial Lease
  • Option
  • Receipt for Purchase Agreement and Earnest Money
  • Closing Statements
  • Authorization to disburse Earnest Money on Transaction which failed to close
  • Any other record generated in connection with Transaction

Trust Accounts


Maintain a complete record of all monies received or escrowed in real estate transactions.  This includes:

  • Deposit slips showing transaction number, date of deposit, amount and where deposited
  • Monthly trust account bank statement, canceled checks and deposit slips
  • A check register which shows funds received and dispersed in a chronological sequence. This includes:
    • for funds received: date of deposit, transaction number, amount
    • for disbursement: date, transaction number, payee, amount
    • the current balance
  • A ledger for each transaction, including:
    • names of principals
    • property address
    • transaction number
    • amount of each deposit
    • date of each deposit
    • check number
    • date of check
    • payee
    • amount of each disbursement
    • the current balance
  • A ledger for broker's funds, if applicable


1.     Balance the Bank Statement

2.     Establish trust account liability by adding the balances of all ledgers.  The total of all ledgers will be the trust account liability.

3.     Compare trust account liability to the reconciled bank balance.  If they don't match, find out WHY.