Real Estate Agent fined for trust account breaches (Harcourts Alliance/Rhonda Massam) : Real estate bulletin issue 153 (August 2017)
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17 August 2017
A Joondalup real estate agency and the person in bone 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 bone 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 Real Estate and Business Agents and Sales Representatives Code of Conduct 2016.
In October 2014, there was a deficit in the trust account of $3,420 following a bank error, which remained unrectified for 15 months.
In September 2015, the agency paid a contractor’s invoice twice by failing to cancel a cheque after paying the invoice by electronic fund transfer, which again left the account in deficit until March 2016.
The SAT acknowledged 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, the sloppy accounting procedures did not satisfy the strict rules that apply to the operation of trust accounts by real estate agents.
The funds in trust accounts are held on behalf of buyers, tenants and property owners and can sometimes involve large amounts, and therefore there needs to be proper procedures and protections 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 or enquiries can be made by email or by calling 1300 304 054.
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