Mississippi Real Estate Commission

Interest on Real Estate Brokers’ Escrow Accounts Act. (IREBEA)

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§73-35-101. Short title
Sections 73-35-101 through 73-35-105 shall be known and may be cited as
the “Interest on Real Estate Brokers’ Escrow Accounts Act.”
§73-35-103. Definitions
As used in Sections 73-35-101 through 73-35-105, the following terms shall
have the meanings ascribed herein unless the context clearly indicates
otherwise:
(a) “Real estate broker” or “broker” means an individual, partnership
or corporation licensed pursuant to Section 73-35-1 et seq., and
as defined under Section 73-35-3(1).
(b) “IREBEA” means the program created and governed by Sections
73-35-101 through 73-35-105.
(c) “Interest earnings” means the total interest earnings generated by
the IREBEA at each individual financial institution.
(d) “Local affiliate of Habitat for Humanity International, Inc.,”
means an independently run 501(c)(3) organization that acts in
partnership with and on behalf of Habitat for Humanity
International, Inc., to coordinate all aspects of Habitat home
building in a specific geographical area.
(e) Local affiliate of Fuller Center for Housing, Inc., means an
independently run 501(c)(3) organization that acts in partnership
with and on behalf of Fuller Center for Housing, Inc., to
coordinate all aspects of home building on behalf of the Fuller
Center in a specific geographical area.
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(f) “Chair of real estate” means the endowment fund held and
administered by any Mississippi university. For those universities
which do not designate, or which do not have a “chair of real
estate,” the term “chair of real estate” includes a professorship of
real estate.
§73-35-105. Interest on Real Estate Brokers’ Escrow Accounts
(IREBEA) program
(1) The IREBEA program shall be a voluntary program based upon willing
participation by real estate brokers, whether proprietorships,
partnerships or professional corporations.
(2) IREBEA shall apply to all clients or customers of the participating
brokers whose funds on deposit are either nominal in amount or to be
held for a short period of time.
(3) The following principles shall apply to clients’ or customers’ funds
which are held by brokers who elect to participate in IREBEA:
(a) No earnings on the IREBEA accounts may be made available to
or utilized by a broker.
(b) Upon the request of the client or customer, earnings may be made
available to the client whenever possible upon deposited funds
which are neither nominal in amount nor to be held for a short
period of time; however, traditional broker-client or brokercustomer relationships do not compel brokers either to invest
clients’ or customers’ funds or to advise clients or customers to
make their funds productive.
(c) Clients’ or customers’ funds which are nominal in amount or to
be held for a short period of time shall be retained in an interestbearing checking or savings trust account with the interest, less
any service charge or fees, made payable at least quarterly to any
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chair of real estate, local affiliate of Habitat for Humanity
International, Inc., or local affiliate of Fuller Center for Housing,
Inc. A separate accounting shall be made annually for all funds
received.
(d) The broker shall select in writing that the chair of real estate, local
affiliate of Habitat for Humanity International, Inc., or local
affiliate of Fuller Center for Housing, Inc., shall be the
beneficiary of such funds for the interest earnings on such funds.
The interest earnings shall not be divided between one or more
beneficiaries.
(e) The determination of whether clients’ or customers’ funds are
nominal in amount or to be held for a short period of time rests in
the sound judgment of each broker, and no charge of ethical
impropriety or other breach of professional conduct shall attend
a broker’s exercise of judgment in that regard.
(f) Notification to clients or customers whose funds are nominal in
amount or to be held for a short period of time is unnecessary for
those brokers who choose to participate in the program.
Participation in the IREBEA program is accomplished by the
broker’s written notification to an authorized financial institution.
That communication shall contain an expression of the broker’s
desire to participate in the program and, if the institution has not
already received appropriate notification, advice regarding the
Internal Revenue Service’s approval of the taxability of earned
interest or dividends to a chair of real estate, or a local affiliate of
Habitat for Humanity International, Inc., or local affiliate of
Fuller Center for Housing, Inc.
(4) The following principles shall apply to those clients’ or customers’
funds held in trust accounts by brokers who elect not to participate in
IREBEA:
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(a) No earnings from the funds may be made available to any broker.
(b) Upon the request of a client or customer, earnings may be made
available to the client or customer whenever possible upon
deposited funds which are neither nominal in amount nor to be
held for a short period of time; however, traditional broker-client
or broker-customer relationships do not compel brokers either to
invest clients’ or customers’ funds or to advise clients or
customers to make their funds productive.
(c) Clients’ or customers’ funds which are nominal in amount or to
be held for short periods of time, and for which individual income
generation allocation is not arranged with a financial institution,
shall be retained in a noninterest-bearing demand trust account.
(d) The determination of whether clients’ or customers’ funds are
nominal in amount or to be held for a short period of time rests in
the sound judgment of each broker, and no charge of ethical
impropriety or other breach of professional conduct shall attend
a broker’s exercise of judgment in that regard.
(5) The Mississippi Real Estate Commission shall adopt appropriate and
necessary rules in compliance with the provisions of Sections 73-35-
101 through 73-35-105.

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