California at a glance
- License
- License to rent or collect rents for others; reservations and money for stays of 30 days or less are exempt
- Trust account
- Trust account in California in the broker’s name as trustee within 3 business days; up to $200 broker funds
- Records kept
- 3 years
- Reconciliation
- Monthly (beneficiary records against the control record)
Details and citations for each point are below.
Who needs a license
- Renting or leasing property, or collecting rents, for others for compensation needs a real estate license.Cal. Bus. & Prof. Code §§ 10131, 10131.01, 10133, 10145, 10146, 10148
- Exemptions include hotel and motel managers, resident apartment managers and their employees, corporate officers for property the entity owns, someone holding the owner’s power of attorney, attorneys and court-appointed fiduciaries.Cal. Bus. & Prof. Code §§ 10131, 10131.01, 10133, 10145, 10146, 10148
Short-term rental rules
- Anyone who, for others, solicits or arranges, or accepts reservations or money for, transient occupancies in a single-family home, a condo or other common interest development unit, or an apartment unit is exempt from the rental license requirement.Cal. Bus. & Prof. Code §§ 10131, 10131.01, 10133, 10145, 10146, 10148
- “Transient occupancy” here means occupancy subject to the local transient occupancy tax — generally stays of 30 days or less.Cal. Civ. Code § 1940; Cal. Rev. & Tax. Code § 7280
The trust account
- Brokers deposit funds of others into a trust account in a bank or recognized depository in California, in the broker’s name (or licensed fictitious name) as trustee, within three business days of receipt — unless the funds go straight to neutral escrow or the principal.Cal. Bus. & Prof. Code §§ 10131, 10131.01, 10133, 10145, 10146, 10148; Cal. Code Regs. tit. 10, §§ 2831, 2831.1, 2831.2, 2832, 2834, 2835
- A broker may keep up to $200 of their own money in the account for bank charges. The broker’s share of mixed funds is taken out within 25 days of deposit.Cal. Code Regs. tit. 10, §§ 2831, 2831.1, 2831.2, 2832, 2834, 2835
- Interest-bearing accounts are allowed only at the owner of the funds’ request, in the broker’s name as trustee for the beneficiary, federally insured and with disclosures; interest may never benefit the broker.Cal. Bus. & Prof. Code §§ 10131, 10131.01, 10133, 10145, 10146, 10148; Cal. Code Regs. tit. 10, §§ 2831, 2831.1, 2831.2, 2832, 2834, 2835
- Withdrawals need the broker’s signature or that of a person the broker authorizes in writing (an unlicensed employee must be bonded).Cal. Bus. & Prof. Code §§ 10131, 10131.01, 10133, 10145, 10146, 10148; Cal. Code Regs. tit. 10, §§ 2831, 2831.1, 2831.2, 2832, 2834, 2835
Advance rents and deposits
- The DRE treats security deposits a broker collects as trust funds, controlled and disbursed on the owner’s instructions.Reference Book, ch. 21: Trust Funds
- Earned management fees may stay in the trust account up to 25 days without counting as commingling, and may not be taken before the funds are deposited.Reference Book, ch. 21: Trust Funds; Cal. Code Regs. tit. 10, §§ 2831, 2831.1, 2831.2, 2832, 2834, 2835
- California’s residential security deposit statute covers rental agreements for property used as the tenant’s dwelling.Cal. Civ. Code § 1950.5
Records and how long to keep them
- Brokers keep trust records, canceled checks and other transaction documents for three years.Cal. Bus. & Prof. Code §§ 10131, 10131.01, 10133, 10145, 10146, 10148
Reconciliation and ledgers
- Brokers keep a chronological control record of all trust funds received and paid out for each trust account, with the daily balance, and a separate record for each beneficiary or transaction.Cal. Code Regs. tit. 10, §§ 2831, 2831.1, 2831.2, 2832, 2834, 2835
- The beneficiary records are reconciled with the control record at least once a month (except months with no activity), and a record of each reconciliation is kept.Cal. Code Regs. tit. 10, §§ 2831, 2831.1, 2831.2, 2832, 2834, 2835
Check with the California Department of Real Estate (DRE)
We could not confirm these from a primary source, so we don’t state them as rules:
- Whether a licensed broker doing exempt short-stay reservation work must still run those funds through a trust account — we found no DRE statement.
- The exemption covers soliciting, arranging and accepting reservations or money; whether it reaches owner payouts, maintenance and other management work is not stated.
- Whether Civil Code § 1950.5 applies to vacation rental damage deposits — the transient occupancy exclusion suggests not, but we found no source that says so.
- Statute and regulation text was read in the DRE’s published copies (the official code site could not be fetched); Civil and Revenue & Taxation Code text was read on FindLaw.
Sources
Each source was read on 2026-10-25.
- Cal. Bus. & Prof. Code §§ 10131, 10131.01, 10133, 10145, 10146, 10148 — California Department of Real Estate (Real Estate Law, 2026)
- Cal. Code Regs. tit. 10, §§ 2831, 2831.1, 2831.2, 2832, 2834, 2835 — California Department of Real Estate (Regulations of the Real Estate Commissioner)
- Reference Book, ch. 21: Trust Funds — California Department of Real Estate
- Cal. Civ. Code § 1940 — FindLawRead on FindLaw (current as of January 1, 2026); the official code site could not be fetched.
- Cal. Civ. Code § 1950.5 — FindLawRead on FindLaw (current as of January 1, 2026); the official code site could not be fetched.
- Cal. Rev. & Tax. Code § 7280 — FindLawRead on FindLaw (current as of January 1, 2026); the official code site could not be fetched.
The reconciliation itself
Whatever your state’s rules, the monthly check is the same idea: the bank, your books and what you hold for each owner and guest should agree. Our three-way reconciliation guide walks through it with a free worksheet. If your reservations run on VacayOps, trust accounting is part of the Full Platform: guest payments are recorded into trust, owner statements build each owner’s balance, and the month’s reconciliation is signed off and exported as a PDF for your accountant. VacayOps records and reconciles the money in your own bank and processor accounts. It never holds or moves funds.