A principal runs a real estate agency|Enrol in a Full Licence
  • 11 Apr 2023
  • 4 min read
  • By Acting Fair Trading Commissioner David McKarzel

Trust account principles for principals

Trust Account, POA, AFAA, OFT, Best Practice

Among the many responsibilities of a real estate agent, one of the most important is the management of the trust account.

Central to achieving its consumer protection objectives, the legislation requires persons who carry on business under the authority of a licence, to maintain close personal supervision of the way the business is conducted.

The Property Occupations Act 2014 (POA) and the Agents Financial Administration Act 2014 (AFAA) aims to protect consumers from financial loss in dealings with agents and the AFAA regulates the way agents establish, manage and audit trust their trust accounts.

A licensee and person in charge must personally supervise, manage, and control the conduct of the business and must take reasonable steps to ensure each employee is properly supervised and complies with the legislation.

Approval processes involving high-risk activities, including receipting trust monies to ledgers, creation of new trust creditors, receipt and disbursement of bonds, and creditor payments in general should not, where possible, be assigned to only one person no matter how trustworthy you believe they are.

Over recent years prosecutions and disciplinary proceedings undertaken by the Office of Fair Trading (OFT) have highlighted the importance of licensees having internal controls to ensure they comply with their responsibilities under the legislation.

In situations where an employee or contractor has misappropriated trust money the principal agent may be held jointly liable both legally and financially for the theft.

Some recent examples of inadequate supervision leading to OFT involvement include:

  • A property manager was renting a property managed by the agency and was allowed to receipt their own rental payments. The property manager created false entries which showed rent being paid, when in fact no rent was received, so they were living rent free.
  • Another property manager was able to create false creditors using their personal bank account and mobile number and submitted false work orders and invoices, subsequently receiving fraudulent payments into their account.
  • A property manager falsified bond payment records and by forging signatures on cheques, had the amounts deposited into their personal bank accounts and not the Residential Tenancy Agency. 


Trust accounts must be operated in accordance with the law, and any abuse of trust by an agent in the handling of money belonging to others is taken seriously by the OFT and the courts.

Severe financial penalties can apply, and agents have been jailed for serious offences.

The maximum penalties are:

  • Wrongful conversion of trust money and false accounts – $143,750 fine or five years imprisonment.
  • Unauthorised payments from a trust account – $28,750 fine or two years imprisonment.
  • Failure to bank trust monies in time – $28,750 fine or two years imprisonment
  • Banking of non-trust monies to a trust account – $28,750 fine or one year imprisonment.
  • Failing to account to clients for all trust money received – $28,750 fine or two years imprisonment.


While there is no foolproof method of preventing fraud, certain fraud prevention techniques have proven effective.

The OFT recommends that all real estate principals be vigilant and follow these tips to minimise the chance of being a victim of employee fraud:

  • Have written procedures for staff and include these when training new staff.
  • Ensure all employees understand how the record keeping system operates, including its capabilities and its limitations.
  • Ensure staff know to report all concerns or suspicions regarding financial mismanagement to the licensee immediately.
  • Double check new creditors are authentic before payments are authorised to them.
  • Never sign blank cheques.
  • Ensure, where possible, a separation in duties of employees receiving, receipting, and creating payments of trust monies.
  • Regularly review how disbursements are handled.
  • Limit access to trust account transactions to only a handful of employees, but never just one employee.
  • Review end of month cash book reconciliations to bank statements and trust ledgers.
  • Conduct regular reviews and check on bond lodgements with the Residential Tenancies Authority.
  • Staff members who deal with trust monies and trust accounts should be trained to at least the minimum standard by completing the ‘Create and Manage Trust Account Processes’ course.

If you are unsure about any aspect of trust account management, I urge you to access the OFT’s trust account guide and other online resources where many essential topics are covered.

Agents can also receive advice from legal and financial professionals if they have questions regarding trust accounts.

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, contact one of our knowledgeable OFT team members by phoning 13 QGOV (13 74 68) or emailing BrisbaneOFT@justice.qld.gov.au.

REIQ members can also contact the Property Management Support Service for advice.

Read more about trust accounts here.

Still looking for more property management related content? Search our entire library of PM articles here.

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