Trust account misuse results in suspension and fine (Steven Webster)
A real estate agent has had his licence suspended for a year and has been fined $10,000 after being reprimanded by the State Administrative Tribunal (SAT) for mismanaging the agency’s trust accounts.
This penalty took into account the eighteen months in which he did not perform the duties of a licensed agent immediately prior to the SAT decision.
Steven Charles Webster, who was sole Director of Spirit Realty Pty Ltd (in liquidation) formerly trading as Professionals Perth based in East Perth, was the subject of disciplinary action by Consumer Protection after an investigation discovered numerous transactions relating to the agency’s trust accounts had breached the Real Estate and Business Agents Act.
Between July 2012 and February 2014, money held in a trust account had been used to pay some of the agency’s operating expenses. A lack of record keeping had led to difficulties in reconciling and auditing the trust account which, at certain times, had fallen into deficit.
On 8 May 2014, the SAT approved an application by Consumer Protection to restrain Spirit Realty Pty Ltd from operating and for a supervisor to be appointed to administer the winding up of the company’s financial affairs after it went into liquidation.
Acting Commissioner for Consumer Protection David Hillyard said, in this case, the breaches were careless rather than dishonest, but that is no defence to contravening the strict rules surrounding the operation of trust accounts.
“Real estate agents who make unauthorised withdrawals from a trust account to cover the agency’s operational expenses are breaking the law, no matter whether it was done as a result of negligence or deceit,” Mr Hillyard said.
“In this case it was clear that the agency’s mismanagement was as a result of critical failures in supervision and governance.
“Funds deposited in trust accounts do not legally belong to the agency and can only be withdrawn with the authorisation of the clients for whom the money is being held. It is important that trust accounts be maintained for client funds only and are not used to hold agency funds.
“Dubious transactions involving trust accounts will eventually become evident and agents face serious consequences if they are found to have failed to properly administer these accounts in accordance with the law.
“Anyone who has any evidence of the misuse of trust money by agents is urged to contact us immediately so an investigation can be carried out and appropriate action can be taken.”
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: email@example.com or by calling 1300 30 40 54.
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