New Regulations
When new regulations are passed, it is important to know where to find information. Hud.gov is and has been a great source for many years. It is time that you might visit it.
URLA Update
In Residential Lending the go-to application for many years has been the Uniform Residential Loan Application (Form #1003 and 65). It has been revised and the word is extremely revised. The optional use of the new form begins on July 1, 2019 and use becomes mandatory on February 1, 2020, That is not too far off. You might want to take a look at it.
Not only has the Application been changed but a new form, Lender Information Form, has been added. Everything has been changed or moved or eliminated. So, where can you get a quick look at said form? Check out URLA Forms here.
In Closing
HUD.GOV. Be the first in your neighborhood to see the forms. Enough said, except the Duane Gomer LIVE CE classes will cover this topic thoroughly. See you in class.
I am a concerned tenant.
I am also in receipt of your newsletters as a forward from a friend in real estate. He says that I should write you as he thinks this practice (in my question below) is not really allowed. I am wondering if there is anything that I should do about it, or if it is simply an acceptable process in the property management realm of life.
My question is about California Real Estate and Property Management regulations in relationship to Trust Fund accounts. I am hopeful that you can answer this in a simple format via this email. I am not quite sure who else to ask at this point.
Is it common practice and/or acceptable for a Property Management Company, Brokerage, “use” or “borrow” funds from a Trust Fund account that has monies collected from tenants for the Tenant’s rent or security deposits?
In other words, can the Property Management company use the funds as a “loan” to themselves, as long as the intent to pay back is there, and is done in a reasonable time, definately BEFORE the Security Deposit is due back to the Tenant?
I suspect that my property management company , the one that is handling my rental, might be making a habit of this practice, and it doesn’t quite seem right to me, but perhaps it is acceptable, as long as it is documented as a loan, and is paid back to the account timely and before I am in need of my security deposit to be returned to me.
Thank you for a reply – I must say I will be most grateful to you.
Ken Grant
A concerned tenant in California.
It is extremely wrong and illegal and punishing by loss of license and fines and even jail in some cases. No borrowing at any time. The fund must balance at any time of an audit. I also would recommend that as a client, you insist that all security deposits, etc. be held by you. You have the right to insist on that factor in your management contract.
You might go to DRE.ca.gov and look at their list of publication publications that include a treatise on Trust Fund Handling. Worth the cost.