Reprimand and fine for trust account failures (Harcourts Integrity)
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A Maylands real estate agency has been reprimanded and fined by the State Administrative Tribunal for failures with its trust accounting.
Caputo & Clay Pty Ltd, trading as Harcourts Integrity, was fined $5,000 and ordered to pay costs of $308 for their accounting failures between January and November 2014 which breached the Real Estate and Business Agents (REBA) Act and the Code of Conduct for Agents and Sales Representatives.
Consumer Protection took disciplinary action against the agency after it was found the agency had:
- withdrawn money without authority from a trust account to pay rent to an owner and property management fees to the agency;
- made two withdrawals from a trust account without authority to pay a cleaning contractor’s invoice and cover costs for a final bond inspection;
- failed to properly record transactions in their trust account journal;
- failed to deposit money from two clients into the trust account as soon as practicable as required by the Act;
- deposited $15,000 from the sale of a Maylands property into an operating account instead of its trust account; and
- failed to reconcile trust account balances between September to December 2014.
In addition to being found guilty of these breaches of the trust accounting provisions of the REBA Act, Harcourts Integrity was also found to have failed to exercise due skill, care and diligence as required by the Code of Conduct.
Acting Commissioner for Consumer Protection David Hillyard said the handling of clients’ money and the operation of trust accounts must comply completely with the law.
“The laws covering the handling of funds from real estate agency clients are designed to clearly separate funds that are held in trust on behalf of clients from the money being used for the day to day operation of the agency,” Mr Hillyard said.
“It puts clients’ money at great risk if they are not deposited promptly into the correct account and then properly accounted for in the agency’s journal.
“It is also imperative that, when they receive funds, real estate agencies must deposit the funds into the appropriate account as soon as practicable. In this case, the agency took eight business days to deposit a $15,000 cheque and then deposited it into an operating account rather than a trust account. This sloppy handling of clients’ funds is unacceptable.”
More information on the obligations of real estate agents and sales representatives is available on the Consumer Protection website: www.commerce.wa.gov.au/cp/realestate or enquiries can be made by email: firstname.lastname@example.org or by calling 1300 30 40 54.
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