Compliance & Audit Support
Specialized Compliance & Audit Support for Real Estate Professionals
At PM Realty Accounting, we understand that real estate professionals face unique compliance challenges. From trust account management to regulatory requirements, our specialized compliance and audit support services help you navigate complex regulations while maintaining focus on your core business activities.
Whether you're a broker managing trust accounts, a property manager handling security deposits, or an agent concerned about tax compliance, our team provides the expertise and systems to ensure you meet all regulatory requirements and are prepared for any audit or review.
Why Compliance Matters
Non-compliance with real estate regulations can result in severe consequences, including fines, license suspension, or even revocation. Proactive compliance management is essential for protecting your business and professional reputation.
Trust Account Management
Trust accounts (also called escrow accounts) are heavily regulated in the real estate industry. Our specialized services ensure your trust accounts are properly managed and compliant with all regulations.
- Trust account setup and organization
- Monthly trust account reconciliations
- Proper documentation of all transactions
- Clear separation of trust and operating funds
- Compliance with state real estate commission requirements
- Security deposit tracking for property managers
- Audit-ready record keeping
- Trust account compliance reviews
Audit Preparation & Support
Our proactive approach to audit preparation ensures you're always ready for regulatory reviews or audits, minimizing disruption to your business.
- Pre-audit reviews and readiness assessments
- Audit-ready financial statement preparation
- Documentation organization and management
- Representation during regulatory audits
- Response preparation for audit findings
- Implementation of corrective actions
- Post-audit compliance improvements
- Mock audits to identify potential issues
Financial Compliance
Beyond real estate-specific regulations, we ensure your business meets all financial compliance requirements.
- Tax compliance and reporting
- 1099 preparation and filing
- Sales tax compliance for applicable activities
- Business license and permit compliance
- Financial record keeping systems
- Internal controls implementation
- Financial policy development
- Compliance training for staff
Common Compliance Challenges for Real Estate Professionals
Trust Account Management
Maintaining proper separation of funds, accurate records, and timely reconciliations for earnest money deposits and other trust funds.
Worker Classification
Correctly classifying agents as independent contractors or employees based on IRS guidelines and state regulations.
Record Keeping
Maintaining complete transaction records, financial documentation, and communications for the required retention periods.
Tax Reporting
Accurate and timely reporting of commissions, income, and expenses, including proper 1099 issuance for independent contractors.
Did You Know?
Many state real estate commissions conduct random trust account audits. Brokers with well-maintained records and proper procedures can typically complete these audits with minimal disruption, while those with compliance issues may face extended investigations and potential penalties.
Frequently Asked Questions
How often should trust accounts be reconciled?
Trust accounts should be reconciled monthly at a minimum, though some states require more frequent reconciliations. Regular reconciliation helps identify and resolve discrepancies quickly, ensuring compliance with regulatory requirements. Our service includes monthly trust account reconciliations, with detailed reports that track all client funds and ensure proper handling of deposits and disbursements. We also maintain a clear audit trail that satisfies regulatory requirements and simplifies the audit process.
How long should real estate transaction records be kept?
Record retention requirements vary by state, but most require real estate professionals to maintain transaction records for at least 3-5 years after closing. Some states require longer retention periods, and certain documents may need to be kept for tax or legal purposes beyond the state-mandated period. We help implement document retention policies that comply with your state's specific requirements while ensuring you have access to important records when needed. Our digital document management solutions make record storage and retrieval efficient while meeting compliance requirements.
What are the consequences of trust account violations?
Trust account violations can result in severe consequences, including fines, license suspension or revocation, and even criminal charges in cases of misappropriation. Even unintentional errors can lead to disciplinary action from your state's real estate commission. Our proactive compliance services help prevent violations through proper systems, regular reconciliations, and ongoing monitoring. We stay current with regulatory changes and help you implement best practices that protect your license and reputation while giving you peace of mind about your compliance status.
Ready to Ensure Your Real Estate Business is Fully Compliant?
Let our team help you navigate complex regulations and prepare for audits with confidence.
Schedule Your Consultation