Trust account breaches result in fine for real estate agent (Harcourts Alliance / Rhonda Massam)
A Joondalup real estate agency and the person in bona fide control of the agency have been fined a total of $4,000 by the State Administrative Tribunal (SAT) for failing to comply with laws relating to the operation of the agency’s trust account.
Bridgeline Pty Ltd, trading as Harcourts Alliance, was fined $3,000 and the person in bona fide control of the agency Rhonda Merle Massam was fined $1,000, with each ordered to pay $750 in costs. The agency failed to balance its trust account at the end of each month as required by the Real Estate and Business Agents Act and Ms Massam failed to properly supervise the agency in breach of the Code of Conduct for Agents and Sales Representatives.
In October 2014, there was a deficit in the account amounting to $3,420 following a bank error which remained for 15 months until it was rectified. In September 2015, the agency paid a contractor’s invoice twice by failing to correctly cancel a cheque after paying the invoice by electronic fund transfer, again leaving the account in deficit until it was rectified in March 2016.
The SAT acknowledged that no client had lost money as a result of the trust account breaches and the agency has taken steps to ensure it won’t happen again.
Acting Commissioner for Consumer Protection David Hillyard said real estate agents need to ensure their accounting procedures quickly pick up and prevent any breaches of the law.
“Although there was no dishonesty involved in this case, there were some sloppy accounting procedures which were not good enough to satisfy the strict rules that apply to the operation of trust accounts by real estate agents,” Mr Hillyard said.
“As the funds in trust accounts are held on behalf of buyers, tenants and property owners and can sometimes involve large amounts, there is a need for proper procedures and protections to be in place.
“Trust accounts must be reconciled at the end of each month and any discrepancies rectified immediately. Failure to do this may result in disciplinary or prosecution action being taken, with agents facing financial penalties and damage to their reputation.”
More information on the obligations of real estate agents and sales representatives is available on the Consumer Protection website: www.dmirs.wa.gov.au/consumer-protection or enquiries can be made by email email@example.com or by calling 1300 30 40 54.
Media Contact: Alan Hynd, (08) 6552 9248 / 0429 078 791 / firstname.lastname@example.org
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