A licensee acting as a closing agent shall comply with all of the following:
 1. All moneys received for disbursement during a real estate closing shall be deposited in a trust account and, when deposited, the moneys shall be designated as trust funds or trust accounts or under some other appropriate name indicating that the moneys are not the moneys of the licensee.

Terms Used In Iowa Code 535B.19

  • Account: means the same as defined in section 554. See Iowa Code 554E.1
  • Administrator: means the superintendent of the division of banking of the department of commerce. See Iowa Code 535B.1
  • Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
  • Closing agent: means a person who is not a party to the real estate transaction, who provides real estate closing services. See Iowa Code 535B.1
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Escrow: Money given to a third party to be held for payment until certain conditions are met.
  • financial institution: means the same as defined in section 527. See Iowa Code 547A.1
  • following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
  • Licensee: means a person licensed under this chapter; however, any natural person who is acting solely as an employee or agent of a mortgage banker, mortgage broker, or closing agent licensed under this chapter need not be separately licensed under this chapter. See Iowa Code 535B.1
  • Money: means the same as defined in section 554. See Iowa Code 554E.1
  • Party to the real estate transaction: means , with respect to a particular real estate transaction, a lender, seller, purchaser, or borrower. See Iowa Code 535B.1
  • Residential real estate: means the same as defined in section 535D. See Iowa Code 535B.1
  • Transaction: means a sale, trade, exchange, transfer, payment, or conversion of a digital asset or any other property or any other action or set of actions occurring between two or more persons relating to the conduct of business, commercial, or governmental affairs. See Iowa Code 554E.1
  • Trust account: A general term that covers all types of accounts in a trust department, such as estates, guardianships, and agencies. Source: OCC
  • Trust account: means a checking account with a federally insured bank, savings and loan association, credit union, or savings bank, which is used exclusively for the deposit of funds transferred electronically or otherwise, cash, money orders, or negotiable instruments that are received by a closing agent to effect a real estate closing. See Iowa Code 535B.1
 2. All trust account moneys shall be deposited in a financial institution that is insured by the federal deposit insurance corporation or national credit union share insurance fund unless the transaction does not involve residential real estate and another financial institution has been designated in writing in the escrow instructions.
 3. If the trust account earns interest and the interest earned is retained by any party other than the party to the real estate transaction who is the owner of the funds, the licensee shall disclose this fact in writing to the parties to the transaction.
 4. A licensee shall enter into a written agreement to pay interest to a party to a transaction, or to a third party if requested by the parties to a transaction, if the client’s trust funds can earn net interest. In determining whether a client can earn net interest on funds placed in trust, the licensee shall take into consideration all relevant factors including the following:

 a. The amount of interest that the funds would earn during the period in which they are reasonably expected to be deposited.
 b. The cost of establishing and administering an individual interest-bearing trust account in which the interest would be transmitted to the client, including any needed tax forms.
 c. The capability of the financial institution to calculate and pay interest to individual clients through subaccounting or otherwise.
 5. The licensee shall notify the administrator of the name of each financial institution in which a trust account is maintained and the name of the account on forms acceptable to the administrator. A licensee may maintain more than one trust account provided it advises the administrator of the multiple accounts.
 6. A licensee shall only deposit trust funds in a trust account and shall not commingle the licensee’s personal funds or other funds in the trust account with the exception that a licensee may deposit and keep a sum not to exceed one thousand dollars in the trust account from the licensee’s personal funds, which sum shall be specifically identified and deposited to cover bank service charges relating to the trust account or to advance funds to pay incidental fees as permitted in section 535B.20, subsection 2.
 7. Moneys deposited in a trust account are not subject to execution or attachment or to any claim against the licensee.
 8. A licensee shall not knowingly keep or cause to be kept any money in any bank, credit union, or other financial institution under any name designating the moneys as belonging to a client of the licensee, unless the money was actually entrusted to the licensee for deposit in trust.
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