$9,000 fine for real estate trust account mismanagement (APFX – deregistered)
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A former real estate agency director has been fined $9,000 and ordered to pay costs of $908 after being convicted of trust account offences at the Perth Magistrates Court on 16 March 2016.
Australian Property Exchange Pty Ltd, known as APFX (deregistered), was licensed under the Real Estate and Business Agents Act and managed residential and commercial properties of consumers in Western Australia prior to its deregistration in November 2013.
APFX’s former director pleaded guilty to 25 charges relating to mismanagement of the APFX trust accounts in 2011, including the authorisation of payments to people who were not entitled to receive money and failing to balance the accounts for almost 12 months. Three offences attracted fines of $1,000 each and for the other 22 offences relating to the reconciliation failures there was a global fine of $6,000.
Acting Commissioner for Consumer Protection David Hillyard said the failures exposed the company’s clients to significant losses and certainly warranted the fine imposed.
“The property industry is strictly regulated and a person in control of a real estate agency and its accounts is responsible for taking reasonable steps to ensure the business and employees of the agency comply with relevant legislation,” Mr Hillyard said.
“With APFX there was a long period of offending where trust accounting errors could not be identified or tracked properly in order to identify losses sustained by consumers. Additionally, the state of the accounts meant that some theft by employees had occurred unbeknownst to the director because the accounts had not been reconciled for some time.
“Any conviction concerning trust accounts generally results in cancellation of an agent’s licence, which demonstrates how serious these offences are. In this case the licences were surrendered some time ago.”
Mr Hillyard said the director was granted a spent conviction.
“The director admitted the offences at the earliest opportunity, had no prior relevant offences, was clearly remorseful and did not gain personally from the conduct. He also cooperated with the Department of Commerce during our investigations and has clearly learnt a harsh lesson.
“The sentencing outcome is still important and should serve as a reminder to people working in the property industry in WA that management of trust accounts must be scrupulous and the importance of accuracy cannot be underestimated.”
Further information for real estate agents about their legal responsibilities is available of the Consumer Protection website www.commerce.wa.gov.au/cp
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