Importance of agents understanding their obligations
A prosecution earlier this year of a former Rainbow Beach real estate agent resulted in imprisonment for the wrongful use of trust money. This is a timely reminder to agents that trust account funds are not your money – they belong to your clients.
The court heard that money in the trust account, that belonged to unit owners, was being transferred to the agent’s business account to cover expenses such as tax debts, staff wages and superannuation payments.
Trust money must never be taken from a trust account without proper authorisation from the client.
Taking trust money for personal use is stealing, and agents who fail to comply with their trust account obligations will incur serious penalties.
When a real estate agent breaches their professional obligations, consumer confidence in the property industry is impacted. Reports concerning property agents disregarding their trust account obligations are taken very seriously by the Office of Fair Trading.
- what is trust money
- how to open and close a trust account
- receiving and paying out trust money
- record keeping requirements
- your responsibilities
Agents can also receive advice from legal and financial professionals if they have questions regarding trust accounts.
Another responsibility of agents is to always act in accordance with the client’s instructions, unless it is unlawful to do so.
This includes ensuring a property is not advertised at a price, or on terms, different from the terms authorised by the client, unless the terms are contrary to the law. Confirming lawful terms with a client is your responsibility at the time your appointment is negotiated.
For example, if a client asks you to market their property in a nearby sought-after suburb, when the property is actually situated in less desirable suburb, it would be unlawful for the agent to comply with those directions. You should advise the client that you are required to advertise the accurate location of the property.
The accuracy of a listing is not only important when it comes to the law, but it is crucial to finding the right buyer. This includes the price, the features of the property or the distance to schools and other landmarks. Every detail must be accurate to ensure there is not false or misleading marketing.
The OFT has developed a ‘Best practice for real estate agents’ video. It can be used as a guide for new industry members or as a refresher for existing property agents.
If you have any questions about your obligations, you can contact one of our knowledgeable OFT team members by phoning 13 QGOV (13 74 68) or emailing BrisbaneOFT@justice.qld.gov.au.
Read more: How the OFT deals with bad behaviour.
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