If a broker establishes an interest-bearing trust account, what must they do regarding the interest earned?

When a broker establishes an interest-bearing trust account, they are required to notify the parties involved and obtain a written agreement regarding the interest earned. This is essential for ensuring transparency and compliance with legal standards, as the parties must be aware of how any interest generated will be handled. It also helps to clarify the expectations around the use of funds in the trust account, safeguarding the interests of clients and ensuring that all parties are aligned on the financial terms.

The requirement for notification and written agreement helps maintain ethical standards in real estate transactions and protects the broker's reputation. It also reflects best practices in managing client funds, highlighting the broker's commitment to fairness and accountability. Additionally, any agreement reached needs to comply with the state laws governing trust accounts, which mandate proper treatment of interest earnings to avoid potential disputes in the future.