Real Estate Agents' Trust Account Compliance: Consumer Protection
- Publisher:
- Pacific Rim Real Estate Soceity
- Publication Type:
- Conference Proceeding
- Citation:
- The Proceedings of the Pacific Rim Real Estate Society, 2023
- Issue Date:
- 2023-01-01
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Licensing of property agents in Australia varies within each individual state and territory. The introduction
of legislation aimed to regulate the property industry and to enhance consumer protection. An individual
working in the property industry buying, selling, leasing and negotiating in property transactions must be
either licensed or hold a certificate of registration under the relevant legislation. In New South Wales there
has been a steady increase in fraud with agency’s trust accounts. The aim of this research was to identify any
trends contributing to trust accounting fraud in property agents’ trust accounts. The purpose of the research
was to undertake a 20 year data set document analysis of public records such as court cases and enforcement
notices relating to the misappropriation of trust account funds. The findings identified a total of 140 instances
of fraud, involving 171 individuals, with 84.80% of these individuals licenced, and 13.45%, holding a
certificate of registration. A very small percentage, 1.75%, did not hold either a licence or certificate of
registration. The various reasons for the misappropriation of trust funds included gambling, funds to operate the property agency business, personal debts, loan scheme scam, pre-drawing of sales commission, and funding legal expenses.
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