(1) Each property manager will maintain a trust account which will be designated by the words "trust account," wherein all deposits, rent payments, or other trust funds received by the property manager, on behalf of any other person, shall be deposited. Such trust accounts may be maintained in interest-bearing accounts with the interest payable to the property manager, principal, third party, or any other person as may be designated by agreement. Interest payable to the property manager must be identified by agreement as consideration for services performed. Offices or firms having more than one property manager may utilize a single property management trust account. Property managers must maintain all required ledgers for each trust account.

(2) All funds belonging to others and accepted by the property manager must be deposited in an insured account in a financial institution located in Montana. The account must be identified by the words "trust account."

(3) Funds deposited in a property manager trust account, in connection with a property management transaction, shall not be commingled with the property manager's personal funds or other funds in the trust account, with the exception that the property manager may deposit and keep a sum not to exceed $1000 in the trust account from the property manager's personal funds, including the interest earned on the trust account, which accrues to the property manager. Personal funds may be distributed to the property manager or the financial institution for payment of trust account bank charges. If personal funds are held in the trust account, a chronological ledger must be kept showing all deposits and disbursements of personal funds. The record entries must clearly identify the parties to a transaction, the dates, and the amounts received. When disbursing funds, the date, payee, and the amount must be shown. A running balance must be shown after each entry.

(4) A property manager may maintain more than one trust account.

(5) All monies belonging to others which are received by a property manager in a residential lease or rental transaction must be deposited in the property manager's trust account within three business days. All monies belonging to others which are received by a property manager in a nonresidential lease or rental transaction must be deposited into the property manager's trust account within three business days, unless otherwise provided in the lease or rental agreement.

(a) When the property management agreement is terminated, but the rental agreement is still in effect, and the licensee is holding funds deposited by a tenant, the licensee shall notify the tenant in writing within five business days that the funds and current tenant files, including lease and condition reports, will be transferred to the property owner or the owner's designee within 30 days of the notification. The notice shall also contain the name and address of the property owner or the owner's designee to whom the funds are to be transferred.

(b) The property manager must transfer funds and current tenant files, including the lease and property condition reports, pursuant to the notice to the tenant.

(6) Maintenance of the trust account will be the responsibility of the property manager. Property managers are responsible for all funds accepted by them or their property management staff.

(7) Except for personal funds referenced in (3), no payments of personal indebtedness of the property manager shall be made from such trust accounts or trust funds.

(8) Money held in the trust account which is due and payable to the property manager must be withdrawn within ten business days after such money becomes due and payable or when the owner and tenant ledgers are reconciled, except as exempted in (4).

(9) Maintenance of a property management trust account shall include the property manager keeping at the property management office a completed record of all funds received in the following manner:

(a) proof of deposit showing the date of deposit, amount, source of money, and where deposited;

(b) monthly bank statements are to be retained and kept on file;

(c) if checks are used, trust account checks must be numbered and all voided checks recorded. The checks must denote the property manager's business name, address, and must be designated as "trust account";

(d) a record which shows the chronological sequence in which funds are received and disbursed;

(i) for funds received, the record must include the date, the name of the party who is giving the money, the name of the principal, and the amount;

(ii) for disbursements, the record must include the date, each payee, and the amount;

(iii) no disbursement from the trust account shall be made until the deposit has been verified;

(iv) a running balance must be shown after each entry.

(10) A chronological ledger must be kept for each tenant showing all rents, deposits, and disbursements. The record entries must clearly identify the parties to a transaction, the dates, and the amounts received. When disbursing funds, the date, payee, and the amount must be shown. A running balance must be shown after each entry.

(11) A chronological record must be kept for each property owner showing all income, expenses, and disbursements. The record entries must clearly identify the parties to a transaction, the date, and the amounts received. When disbursing funds, the date, the payee, and the amount must be shown. A running balance must be shown after each entry.

(12) The trust account must be reconciled monthly, except in the case where there has been no activity during that month.

(13) Every property manager shall keep all records required by (9) and complete files of properties managed (property management agreement, rental agreement, and all transactions concerning the property in which the property manager was involved) for not less than eight years from the date the property management agreement terminates.

(14) All required trust account records may be maintained electronically but must be maintained in a manner to permit auditing.

(15) The board is authorized to examine each property manager's trust account and all related records. Such examination will be conducted by a board representative and will be at such time as the board representative may request during normal business hours. The property manager is required to fully cooperate with the board representative.