Trust account

Definition

The regulated account holding client rents and deposits, separate from the company's own money.

Why It Matters

This is a licensing line as much as an accounting one. Commingling or a shortfall is a serious violation that can cost the license, which is the business, so the reconciliation is mandatory diligence rather than a formality. Ask for the last twelve monthly reconciliations and check the balance against what the leases say is held. A gap is not always fraud, it is often sloppiness, and both transfer to you.