Trust Account

Learn how trust accounts work in Canadian real estate, who manages them, and how they protect buyers and sellers during transactions.

Trust Account



What is a Trust Account?

A trust account is a special type of bank account used by real estate professionals, lawyers, or developers to hold client funds separately from their own operating funds.

Why Do Trust Accounts Matter in Real Estate

In Canadian real estate, trust accounts are a critical component of financial and legal protection. When a buyer submits a deposit during a property transaction, that money is held in a trust account until closing.


Trust accounts are used for:
  • Buyer deposits or down payments
  • Rent collection by property managers
  • Construction draws or developer funds


Real estate brokerages and law firms are regulated and audited to ensure trust accounts are properly maintained. Misuse or commingling of funds can result in disciplinary action, fines, or loss of license.


Trust accounts provide transparency and security, ensuring that funds are available and accounted for during the transaction. Buyers and sellers should always confirm that deposits are being held in a verified trust account.


Understanding trust accounts builds confidence in the real estate process and protects clients from financial risk.

Example of a Trust Account

A buyer’s $50,000 deposit is held in the listing brokerage’s trust account and only released upon successful closing of the home sale.

Key Takeaways

  • Holds client funds securely during transactions.
  • Used for deposits, rents, and development funds.
  • Maintained by lawyers or brokerages.
  • Separates client money from business funds.
  • Ensures trust, compliance, and accountability.

Related Terms

  • Deposit
  • Real Estate Lawyer
  • Brokerage Account
  • Closing Process
  • Financial Regulation

Additional Terms

Budgeting

Budgeting in real estate refers to the process of forecasting and managing income and expenses associated with owning, operating, or developing a property.. more

Tenant Improvements

Tenant improvements refer to custom modifications or build-outs made to a leased space to suit the tenant’s operational needs, often negotiated as. more

Highest and Best Use

Highest and best use refers to the reasonably probable use of a property that results in the highest value, provided it is legally permissible,. more

Gross Lease

A gross lease is a commercial lease where the tenant pays a fixed rent, and the landlord covers most or all operating expenses such as property. more

Brownfield

A brownfield is a property that was previously used for industrial or commercial purposes and is now vacant or underused, often requiring. more

Record of Site Condition (RSC)

A Record of Site Condition (RSC) is a formal document filed with a provincial environmental authority certifying that a property meets required. more

More For You

Camrost Felcorp Names Joseph Feldman President & COO Ahead Of 50th Anniversary

Joseph Feldman (left), David Feldman (right) of Camrost Felcorp

As it gears up for its 50th year in operation, Camrost Felcorp has made major changes to its senior leadership team, including the appointment of Joseph Feldman to President and Chief Operating Officer. The company behind landmark projects like Upper East Village in Leaside and the Exchange District in Mississauga announced Monday that former President David Feldman will stay on as Chairman and Chief Executive Officer, and will maintain an active role in Camrost’s “overall direction.”

“As we reflect on the company’s success over the past 50 years, it’s not only a moment to appreciate the legacy we’ve built — but more importantly, an opportunity to think boldly about the next 50,” said David in a press release. “We’re evolving our leadership and sharpening our focus to be even more responsive, ambitious, and future-oriented—building on the strength of our team, the values that have guided us from the beginning.”

Keep ReadingShow less
Plans For 34, 11 Storeys Near Kennedy GO Advance With SPA Application
2157-2183 Lawrence Avenue East/Kirkor Architects

A Scarborough housing proposal is moving ahead with a Site Plan Approval (SPA) application that seeks to replace a low-rise commercial plaza with a 34- and 11-storey mixed-use development that would offer 565 new rental units.

According to the planning materials, the SPA follows a September 2023 Zoning By-law Amendment application for a smaller 24- and 21-storey structure, which was approved in April 2024 with amendments that brought the heights up to their current specifications. With the approval came a (“H”) Holding Symbol to be cleared with the successful review of a Functional Servicing Report, Stormwater Management Report, and Methane Gas Study.

Keep ReadingShow less
Headshot of Ankur Singla of Homelife Silvercity Realty Inc.

Welcome to Meet the Agent, an ongoing series profiling real estate agents from across Canada. With more than 150,000 agents, brokers, and salespeople working in 75 different boards and associations across the country, we thought it was about time they had a place to properly introduce themselves.

If you or someone you know deserves the same chance, email agents@storeys.com to apply.

Keep ReadingShow less
Toronto Releases Free Pre-Approved Garden, Laneway Suite Plans
Pre-approved plan for two-bedroom laneway suite/City of Toronto

In 2018, the City of Toronto amended zoning bylaw to allow laneway suites on residential properties in the Toronto and East York District, expanding the permissions citywide by 2020 and with the addition of garden suites in 2022. The amendment was intended to increase the number of housing options and infill opportunities in the city, ultimately helping to improve affordability for Torontonians.

Now, the City is implementing additional measures to cut down approval timelines and make the construction of garden and laneway suites more accessible, including releasing free blueprints, expanding online services for building permit submissions, and including garden and laneway suites in the existing Reliance on Professional Engineer’s Seal program.

Keep ReadingShow less
A rendering of the new W Calgary and JW Marriott Calgary.

A rendering of the new W Calgary and JW Marriott Calgary. / Truman, Louson

This week, Calgary-based real estate developer Truman and hospitality giant Marriott International announced plans for a group of new hotels that are "poised to transform the hospitality landscape in Calgary and will debut as part of a dynamic mixed-use development ideally situated within the city's rapidly evolving Culture + Entertainment District."

The first is the 69-storey W Calgary that will include 157 guest rooms and 239 branded residences. Guests of the hotel will have access to amenities such as a 7,500 sq. ft AWAY Spa, 16,259 sq. ft of meeting space, the W brand's signature Living Room, expansive FIT studio, and a rooftop bar. Residents will also have access to the amenities, in addition to a dedicated private entrance. The W Calgary is expected to open in 2029.

Keep ReadingShow less
69 Storeys For Isabella Street: Akelius Eyes Major Tower With Heritage Integration
Ground-level rendering of 81-83 Isabella Street/Arcadis

If you find yourself on Isabella Street, between Church and Jarvis in downtown Toronto, you may walk by a heritage building known as The Merlan without even knowing it. Designed by Ontario’s own Norman Alexander Armstrong, the 49-unit, Edwardian Revival-style apartment building has occupied 81-83 Isabella Street for just shy of a century.

However, with The Merlan rising just three storeys, its location in Church-Wellesley Village stands to be better utilized. As such, site owner Akelius Canada Inc. is proposing the demolition of the existing apartment in favour of a residential tower rising 69 storeys — some 744 feet, inclusive of the mechanical penthouse. The heritage facades of The Merlan would be integrated into the new build through adaptive reuse, according to a planning report that went to the City in early June.

Keep ReadingShow less
GTA Active Listings Hit Another High, With 31,600 Units On The Market
Eva Bronzini/Pexels

After hitting a nearly 25-year high in May, active listings in the Greater Toronto Area (GTA) only grew over the course of June, according to the Toronto Regional Real Estate Board's (TRREB), as tariff-related economic uncertainty continued to win out over improved affordability.

With many still wary about jumping off the sidelines, the region posted a mere 6,243 sales last month, essentially unchanged from May and 2.4% below June 2024's sales, according to TRREB's June Market Watch report. On a seasonally-adjusted basis, however, sales did edge up month over month, following two months of consecutive increases in April and May.

Keep ReadingShow less
Residential buildings in Vancouver.

Residential buildings in Vancouver. / Shutterstock

Is the worst of the real estate market downturn over now? The answer to that question may be a "yes," according to Greater Vancouver Realtors (GVR), who said in their statistics release this morning that "After a turbulent first half of the year, home sales registered on the MLS across Metro Vancouver are showing emerging signs of a recovery."

In June, the Greater Vancouver region recorded a total of 2,181 home sales, which is 9.8% below the 2,418 recorded in June 2024 and 25.8% below the 10-year June average of 2,940. While last month's totals are still down, GVR says the decline has been halved from the previous month, a silver lining that could be a sign of improvement to come.

Keep ReadingShow less