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A former Director of an East Perth real estate agency has been ordered to pay a total of almost $4,000 by the Perth Magistrates Court for unlawfully transferring funds from the agency’s trust account that were later deposited into his personal accounts.
The man, who was granted a spent conviction, was fined $2,500 on 14 February 2023 after pleading guilty to breaching the Real Estate and Business Agents Act. He was also ordered to pay $1,472.30 in costs.
During the process of finalising the sale of his agency in December 2020, a $5,000 deposit relating to an offer to purchase a property north of Albany was placed into the agency’s trust account by the potential buyers.
A few weeks later and without authorisation, the man transferred the $5,000 into the agency’s operating account. He then withdrew $13,593.87 from the operating account and deposited the funds into both his personal credit card and home loan offset accounts.
The buyers’ purchase of the property failed to go through and they were unable to be refunded their $5,000 deposit due to the unlawful transfer. They were eventually compensated by the Fidelity Guarantee Account, which was later reimbursed by the man before sentencing.
The agency surrendered its licence and triennial certificate in May 2021 and is no longer operating.
Commissioner for Consumer Protection Trish Blake said such actions by the former Director were a serious breach of faith that undermines confidence in the industry.
“Funds held in a real estate agency’s trust account are not to be used to pay for business or personal expenses,” Ms Blake said.
“The money remains the property of the agency’s clients until the sale of the property is completed, so to make unauthorised and illegal withdrawals is a serious betrayal of trust.
“The laws that cover the use of trust account funds are in place to protect buyers and sellers involved in real estate transactions and must be obeyed. If not, the law breakers may face prosecution and their licence could be put at risk.”
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 firstname.lastname@example.org or by calling 1300 30 40 54.
Media Contact: Alan Hynd, (08) 6552 9248 / 0429 078 791 / email@example.com