BIC TIP #1135: Provisional Brokers and Money
Provisional brokers ask it all the time: am I allowed to touch the money? Can a PB sign at the front desk when due diligence or earnest money comes in? Can they deliver it? Stephen Long has good news for the PBs out there. The answer is yes, you absolutely can, with one important limit.
Yes, PBs Can Receive Funds
A provisional broker can sign for receipt of due diligence fees and earnest money deposits. They can accept the funds, deliver them where they need to go, and serve as the person who takes possession of those monies on behalf of the firm.
That is good news for busy offices. When the buyer drops off a check, the PB at the desk does not need to go hunting for a full broker to sign the receipt.
Sign the Contract Receipts, Too
The Offer to Purchase and Contract has a spot on the last page to acknowledge receipt of funds. Provisional brokers can sign there as well. That signature matters because it creates a record of when the money was delivered and who received it.
Accurate receipts help everyone track deadlines and deposits. When the question later becomes when the earnest money arrived, a clean signature with a date answers it quickly.
The Line PBs Cannot Cross
Here is the limit. A provisional broker cannot manage a trust account. Trust account management carries serious responsibilities, including proper deposits, records, and reconciliations, and that role belongs to a properly licensed broker, typically under the supervision of the broker-in-charge.
So receive it, sign for it, deliver it. Just do not try to run the trust account. If you are unsure how your firm handles deposits after you receive them, ask your broker-in-charge for the office procedure.
The Practical Takeaway
Provisional brokers can accept and deliver due diligence and earnest money and can sign the receipt lines on the contract. They cannot manage a trust account. Know your firm’s handoff process, document every receipt, and then get back out there and sell. Signing for money is a pretty good day at the office.
