What is a Trust Account?

A Trust Account is defined as an account that is separate and apart from personal monies, and it is required by law in many jurisdictions, including Nova Scotia, to ensure proper handling of client funds by real estate professionals. This account is used specifically to hold funds that belong to others, such as deposit money given by buyers or earnest money in real estate transactions. The requirement for a Trust Account aims to protect clients' money, ensuring it remains safe and is only used for its intended purpose, thereby preventing any commingling with the realtor's personal funds. This legal requirement helps maintain ethical standards and trust within the real estate industry.

In contrast, accounts designated for business expenses or for saving on transactions do not specifically adhere to the fiduciary responsibilities required in real estate transactions. Similarly, while rental income collection might involve specific accounts, it does not encompass the broader legal requirements and protections associated with Trust Accounts.