Business sales agent fined over unauthorised trust account withdrawal (Sigma Business Sales Pty Ltd / Michael Harrold)
- Unauthorised withdrawal of a $50,000 deposit after business sale settlement
- Business broker and his company fined a total of $7,000 plus $1,000 in costs
- Warning that violations of trust account laws will not be tolerated
A West Perth business sales agent and his company have been fined by the State Administrative Tribunal after making an unauthorised $50,000 withdrawal from the agency’s trust account.
Sigma Business Sales Pty Ltd was fined $4,000 plus costs of $1,000 and sole Director Michael Harrold was fined $3,000, for breaching the Real Estate and Business Agents Act and the Code of Conduct. The matter was resolved after Consumer Protection commenced disciplinary action and consent orders were agreed between the parties.
The withdrawn $50,000 was the deposit for the sale of a business that went ahead in November 2018 but, according to the sales agreement and the appointment to act, Sigma Business Sales and Mr Harrold were only entitled to withdraw about $16,900 in fees at the time of settlement.
The company and agent surrendered their licences in January 2021 when the business ceased to operate.
Executive Director for Consumer Protection Trish Blake said the laws that apply to the use of trust account funds were strict for a good reason.
“The sale of real estate or a business usually involves the transfer of large amounts of money which are often held in trust until disbursed at settlement,” Ms Blake said.
“The agent is holding the funds on behalf of the buyer and seller so is not entitled to make any withdrawals that aren’t authorised by the sales agreement. To flout these laws is a serious matter and we have zero tolerance to any violations.
“Unauthorised trust account withdrawals will always be identified through our regular audits and offenders will face disciplinary action or prosecution.”
More information on the obligations of real estate agents, sales representatives and property managers is available on the Consumer Protection website 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
Share this page: