OFT Spotlight on Trust Account Mismanagement
A prosecution last month into the wrongful use of trust money by a Noosa resident letting agent highlights how seriously this conduct is viewed by the courts and acts to remind the real estate industry of the consequences of not dealing with trust money appropriately.
In April, a former Noosa resident letting agent was found guilty and sentenced in the Brisbane Magistrates Court after dishonestly converting trust money to her own use.
Between January and October 2019 the woman, who managed the letting of holiday accommodation, dishonestly converted a significant amount of money from the corporation’s trust account. This money was subsequently reimbursed into the trust account and disbursed to the rightful owners.
Following an audit, the company that holds the letting rights notified the OFT of the issue, and upon OFT’s investigation it was found that there were unauthorised transactions from the trust account totalling $294,450.
In addition to being sentenced to six months’ imprisonment (wholly suspended for two years) and a $2,000 fine for the company, her real estate licence was disqualified for two years and a conviction was recorded against her.
This is a strong reminder to real estate agents who may be tempted to use or deal with trust money in an unlawful manner.
Real estate agents know that money held in a trust account does not belong to them and that it must only be distributed to the person entitled to it. Charges will be brought by the OFT for breaches such as these and anyone found guilty can expect serious penalties.
- what is trust money
- how to open and close a trust account
- receiving and paying out trust money
- record keeping requirements
- your responsibilities
The OFT also provides a best practice for real estate agents video. It is easily accessible to all on YouTube and can be used as a guide for new industry members or as a refresher for existing property agents.
You can also contact one of our knowledgeable OFT team members by phone on 13 QGOV (13 74 68) or by email at BrisbaneOFT@justice.qld.gov.au with any questions in relation to trust accounts.