May 20th, 2019 at 1:35 pm
As the landlord’s agent for a new lease listing, can I require the tenant to submit 3 cashier’s checks? The 3 checks would be made payable as follows: (1) to our brokerage for our share of the commission; (2) to the tenant’s brokerage for its share of the commission (if no dual agency); and (3) to the landlord for the remaining balance.
Answer: Yes, with the landlord’s permission. The C.A.R. Residential Lease or Month-to-Month Rental Agreement (Form LR) was revised in June 2017 to make it easy for a landlord to require separate checks for the tenant’s move-in funds (see paragraph 5). Landlord-tenant agents generally prefer this 3-check method because they typically get paid more quickly as compared to having the tenant pay the entire move-in fee to the landlord, and then waiting for the landlord to pay the listing broker, and the listing broker to pay the tenant’s broker.
As an agent representing the landlord or tenant, if you physically touch a check that includes funds that do not belong to our company, those funds are considered trust funds. You must comply with special rules for handling trust funds, including, but not limited to, logging the check in and out of our trust fund log, safeguarding the check while in your possession, and as a general rule, delivering the check to the rightful person within 3 days.
If the landlord and tenant agree that the tenant will wire the remaining balance directly to the landlord’s account, be sure not to get involved with any wiring instructions. Also, for any lease transaction, remember to give your client our BHHS Anti-Fraud Disclosure Statement (or the C.A.R. equivalent).
-Thank you to Nicki Marcellino (La Jolla Branch Manager) for suggesting this week’s legal tip.
Copyright© 2019 Berkshire Hathaway HomeServices California Properties (BHHSCP). All rights reserved. Any unauthorized reproduction or use of this material is strictly prohibited. This information is believed to be accurate as of May 20, 2019. It is not intended as a substitute for legal advice in individual situations, and is not intended to nor does it create a standard of care for real estate professionals.
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