Extreme action against trust fund misuse justified: Consumer Protection

Extreme action against trust fund misuse justified: Consumer Protection
Extreme action against trust fund misuse justified: Consumer Protection

Two Perth real estate agencies have seen Consumer Protection given supervision orders by the State Administrative Tribunal (SAT) due to their misuse of trust accounts. 

Supervision orders require the company to carry on the duties for the agencies, before winding them up.

The two agencies were also said to be unable to operate within the Real Estate and Business Agents Act.

Kurt James Wallace, who traded as Scope Investment Services, was restrained from operating under an SAT approved application on 18 June 2014. A supervisor was ordered to be appointed to administer the financial affairs for Scope Investment Services.

Rent money should have been deposited into a trust account, but was instead put into the general agency account. This was not corrected and had been found in a Consumer Protection investigation. Wallace also failed to renew his triennial certificate in April 2014.

The second real estate agency that Consumer Protection took action against was Spirit Realty Pty Ltd that had been trading as Professionals Perth. The application was approved on 8 May 2014.

Numerous breaches of the Real Estate and Business Agents Act were found during an examination of the trust accounts. After the investigation began, they went into voluntary liquidation – said to be a significant reason behind the order that they could no longer conduct their business in accordance with the Act.

Commissioner for Consumer Protection, Anne Driscoll, conceded the actions are extreme, but said they are justified when client’s money has been misused.

“Bond and rental payments are not the property of the agent, that’s why they are held in trust on behalf of the agency’s clients. Failing to properly administer these funds is a serious offence with serious consequences under the law,” Driscoll said.

“There are strict rules governing the handling of client’s money and all licensed real estate agents need to be well aware of their legal obligations and adhere strictly to the law.

“Anyone who has any evidence of the misuse of trust money by agents is urged to contact us immediately so an investigation can be carried out and appropriate action can be taken.”

Jennifer Duke

Jennifer Duke

Jennifer Duke was a property writer at Property Observer

Tags: 
Consumer Affairs Perth

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