Property 101: Consumer Affairs Victoria requirements for estate agent trust accounts

Are you are an estate agent or conveyancer who manages a trust account? You must have the account audited for the 2015-16 financial year by an approved, independent auditor and provide the audit report to the Director of Consumer Affairs Victoria.

Auditors must use the audit form we have approved.

Estate agents must:

• have caused their trust accounts to be audited within three months of 30 June, and 
• lodge a copy of the audit report with the Director within 10 business days of receiving it from the auditor.

Conveyancers must:

• have their audit reports completed within seven weeks of 30 June
• lodge a copy of the audit report with us within 10 business days of receiving it from the auditor.

If you don’t fulfil your trust account audit obligations, you can be penalised up to 120 penalty units.

You must keep your trust accounts in a way that allows a proper and convenient audit.

The default reporting period is the standard financial year unless you have received approval from the Director for an alternate reporting period.

During the audit, if your auditor brings a trust account matter to your attention, you must take action to correct the problem.

We consider the following to be serious matters:

• banking trust money late
• having deficiencies in trust accounts
• failing to keep cash receipts or cash payments journals (commonly known as ‘cashbooks’)
• releasing sales deposits early, and
• lodging bonds late, or not at all.

We take enforcement action against estate agents and conveyancers who do not meet their legal obligations.

Trust account inspection program 2015-16

In 2015-16 we issued 120 infringements - totalling $94,520 in fines - for trust account matters. We issued:

• 52 infringements ($948 each) to agents for failure to cause an audit
• seven infringements ($1820 each) to agents for failure to lodge audit report with the Director within 10 business days
• 61 additional infringements for trust account related matters (various regulations), totalling $32,484.

We also sent 295 formal warning letters to agents for breaches of trust accounting regulations.

Trust account inspection program 2016-17

This financial year, we are continuing to focus on estate agents and conveyancers properly accounting for trust money. We will inspect more estate agents and conveyancers (including those issued with a formal written warning).

View our most recent completed legal action on a trust account matter: Michael Robert Knight – Court action.

For more about your trust account obligations, view our Auditing estate agents trust accounts page or Auditing conveyancers trust accounts page.

We will continue to provide information to help businesses comply with their obligations, including via our website, publications and call centre.