Fine for real estate sales agency after trust account breach (Port City Real Estate)
An unauthorised withdrawal from a trust account has resulted in a Fremantle real estate agency being fined $3,000 and ordered to pay costs of $1,000 by the State Administrative Tribunal.
Port City Pty Ltd, trading as Port City Real Estate, had withdrawn $4,735 from the trust account in July 2017 as a “break contract fee” in circumstances where its agreement with the client who had engaged the agency to manage four commercial units did not permit it.
The agency believed they had authority to withdraw the funds when the client failed to respond to correspondence advising them of the charge.
The agency stated that it has made changes to its procedures to ensure the breach of the Real Estate and Business Agents Act is not repeated.
Commissioner for Consumer Protection David Hillyard said real estate agents must not assume funds being held in trust on behalf of clients can be withdrawn without authority.
“Technically the money is owned by the client until it can be dispersed according to the property management agreement, as specified by the Act or as agreed by the parties,” Mr Hillyard said.
“Agencies must be acutely aware of the rules surrounding the handling of trust funds and ensure that they are followed, without exception.
“Even if money is withdrawn by a mistaken belief, the violation can result in disciplinary proceedings, as has happened in this case, which adversely affects the agency’s reputation in the community.”
More information on the obligations of real estate agents and sales representatives is available on the Consumer Protection website: www.consumerprotection.wa.gov.au 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