19 February 2024

Agent fined for failing to comply with audit requirements

Failing to cooperate with requests from an auditor has seen a real estate agent fined $3,750 and ordered to pay costs of $529.30 in the Geraldton Magistrates Court.

The agent, who received a spent conviction, did not renew their triennial certificate in November 2021. An annual audit and a termination audit of the Agent’s trust account were required to be submitted to Consumer Protection in order to comply with the Real Estate and Business Agents Act 1978 (the Act).

On 23 October 2023, the agent pleaded guilty to three charges of failing to produce information to the auditor, failing to have an annual audit conducted and failing to have a termination audit conducted.

Commissioner for Consumer Protection Trish Blake said failing to complete trust account audits made it difficult for Consumer Protection to determine whether funds being held in trust for clients were properly managed and the money properly dispersed when an agency closed down. This is an important safeguard for consumers. Agents need to ensure that audit reports are submitted within the required time so they can be checked for compliance.

When handing down the sentence, the Magistrate informed the agent that it is important to comply with the audit to maintain confidence in their business. If the agent is holding money for someone else, it is important the money is appropriately distributed.

Real estate agents auditing requirements

Consumer Protection reminds all real estate agents and real estate business agents who hold or receive money on behalf of others relating to a real estate transaction in Western Australia, they are required to open and maintain trust accounts. The Act and the Real Estate and Business Agents (General) Regulations 1979 (the Regulations) require the strict maintenance of a formal set of trust account records that show at any time the state of a real estate agent’s trust account.

Section 70 of the Act requires persons who carry on business as a real estate agent to have their trust accounts audited annually according to the requirements determined by the Commissioner for Consumer Protection and in accordance with accepted auditing practice. Section 77(1) of the Act requires the agent to provide the required information to the auditor for the purpose of audit.

Agents are required to have their trust accounts audited annually by their appointed auditor, with the audit report due to be submitted to the Commissioner for Consumer Protection by 31 March each year. The 2024 deadline is fast approaching, so agents are reminded that they should by now have these arrangements in place.

The Real estate and business agents' trust account handbook provides information for real estate agents and real estate business agents on auditing requirements.

More information on the obligations of real estate agents and sales representatives is available on the Consumer Protection website or enquiries can be made by email consumer@dmirs.wa.gov.au or by calling 1300 30 40 54