Supervising an agencyPayment of trust money into a trust accountLicensees under the Property and Stock Agents Act 2002 (the Act) must hold clients’ funds in a trust account. Show
Those funds cannot be used for any purpose other than for that client and must be disbursed as the client directs. ‘General’ trust accounts should not be confused with ‘Separate’ trust accounts opened on behalf of vendor/purchaser or strata plans or established by the owners corporation of a strata scheme as required under the Strata Schemes Management Act 2015. Licensees in charge to authorise trust account withdrawalsOnly a licensee in charge (LIC) of a business may authorise trust account withdrawals from a trust account. This means that LICs are responsible for reviewing and approving all transactions for the trust account before they occur, including electronic fund transfers and payment of trust money by cheque. There can also only be one LIC who is able to authorise withdrawals for a trust account. An LIC will be unable to delegate their authority to another person. LICs should be aware that if they allow another person to withdraw funds from the trust account on their behalf, they may still be held liable for any breach or defalcation. Approved deposit-taking institutionsTrust accounts must be kept at an authorised deposit-taking institution in NSW. The Secretary has approved the following deposit-taking institutions:
Requirements when opening a trust accountWhen opening a trust account, these requirements apply:
Unique identifying numbers for general trust accountsUnder the Property and Stock Agents Regulation 2014, a licensee who opens a trust account must provide the authorised deposit-taking institution (bank) with a unique identifying number given by NSW Fair Trading. Each trust account must have a unique identifying number. If a business maintains multiple trust accounts, each account will need to be registered separately. If the trust account is held by a corporation, the trust account must be registered using the corporation's licence number. Licensees can use NSW OneGov to apply for a unique identifying number and obtain the necessary form(s) to notify their authorised deposit-taking institution. The authorised deposit-taking institution lodges its monthly returns using this unique identifying number. Licensees maintaining a trust account that was opened prior to 31 December 2014 must also obtain a unique identifying number and have it registered by their authorised deposit taking institution. How can I register online?Access the trust account registration to get a unique identifying number for all trust accounts you intend to open or maintain. Once you enter your licence number and email address, you will be sent a confirmation email with a notification form in duplicate attached. Print the forms and lodge them with your financial institution and keep the duplicate once stamped by the financial institution. Authorised deposit-taking institutions’ requirementsThe Act sets out requirements for approved authorised deposit-taking institutions with regard to:
Exempt trust accountsAn authorised deposit-taking institution is not required to pay interest to the Statutory Interest Account or provide monthly reports to NSW Fair Trading for trust accounts that are a 'Separate' trust account:
Requirements when closing a trust accountA licensee must, within 14 days after closing a trust account, either:
A copy of the Green Form can be obtained by clicking on the link shown below. Note: If a financial institution has not fully uploaded their file records online on the Government Licensing System, via the Notification of Closing a Trust Account, the system will not recognise the account number entered by an agent. The licensee must keep the trust account closure confirmation notice for three years. The Green Form needs to be signed by the licensee (in duplicate):
Unclaimed trust moneyFrom 1 July 2013, the responsibility for handling unclaimed trust money was transferred from NSW Fair Trading to Revenue NSW. The Unclaimed Money Act 1995 now applies to unclaimed money held in a trust account under the Act. Trust money is considered unclaimed if it has been held by a licensee for more than two years in a trust account. This applies to all amounts of money. A licensee must make reasonable efforts to locate the owner of any outstanding money in the trust account. Failure to do so could attract a penalty of up to $5,500. Money held in a trust account by a former licensee or the personal representative of a deceased licensee is unclaimed money and must be returned to the Revenue NSW within three months after the person ceased to be a licensee or became a personal representative. Failure to comply can attract a penalty of up to $5,500 and up to $550 for each additional day of non-compliance. What to do with unclaimed trust moneyAll returns and payments should be made to the Chief Commissioner Revenue NSW, and not to Fair Trading. Visit the unclaimed money page of the Revenue NSW website for more information. Trust account audit requirementsLicensees' records in relation to the handling of trust money must be audited. Who is required to have their trust accounts audited?The following people must have their trust accounts audited if they received or held trust money during the financial year ending 30 June:
Generally, for licensed corporations, it is the corporation that receives and is responsible for trust funds and not an individual licensee. In these cases, the corporation must ensure the trust account audit takes place. However, if an individual licensee receives and is responsible for trust money, then they must ensure the trust account audit is done. Who is required to submit an audit?All trust account audits must be completed and submitted online by the auditor through the Auditor’s Report Online portal. When must the audit be submitted?All audits must be submitted to the Secretary within 3 months after the end of the audit period and no later than 30 September of that year. Please note that all previously approved alternate audit periods are now rescinded. If a trust account audit is not submitted by the due date, licensees could be disqualified from holding or renewing a licence. Who can conduct the audit?Auditors must be qualified under section 115 of the Property and Stock Agents Act 2002. Registered audit companies, authorised company auditors and members of a Professional Accounting Body holding a Public Practising Certificate or Certificate of Public Practice can conduct the audit. Professional Accounting Body is defined under the Australian Securities and Investments Commission Act 2001, for example, CPA Australia, Chartered Accountants Australia and New Zealand and the Institute of Public Accountants. Who can't conduct the audit?Within the last 2 years of the audit period, an auditor must not have been employed by, nor be a partner of, the person whose records or documents are to be audited. An auditor must not be a licensee, or a shareholder in a corporation that is a licensee with less than 20 shareholders. Check that an auditor is registered by searching for their details on the ASIC website. Audit for 2021/22 financial yearTo prepare an audit report for trust money held during the 2021/22 financial year, visit the Trust account auditors page. Audits must be submitted using Auditor’s Report Online. If you have any questions about the audit requirements, contact Fair Trading on 13 32 20. If no trust money held in 2021/22If a licensed corporation or an individual licensee holds a trust account during the audit period 2021/22 and there have been no transactions and zero balance, you must send an email with a copy of the bank statement for the full audit period to . Audits for other financial yearsIf a licensee has an outstanding audit commitment for any of the previous financial years, send your enquiry to: Frequently asked questions
Who has to lodge a trust account auditor’s report?Under the Property and Stock Agents Act 2002 and Conveyancers Licensing Act 2003, all licensees are required to lodge a trust account auditor’s report if they received or held trust money during the audit period.
When does it have to be lodged?Lodgement must be within 3 months of the end of the audit period which is 30 June each year. The due date for lodgement is 30 September each year. You still need to lodge even if you ceased trading during the period or only traded for part of the period.
Who's responsible for lodging the auditor’s report correctly and by the duedate?The Act makes it clear it's the licensee’s responsibility to ensure the report is lodged by the due date. Before engaging an auditor, inform them that the report must be lodged by 30 September and confirm that the auditor will be able to complete the report in time for you to lodge it by the due date. Give the auditor access to all records and documents relating to money held in a trust account for the audit period, as soon as possible after the end of the audit period. Monitor the progress of your report with the auditor on a regular basis. Don't leave the report with the auditor and forget about it. If your auditor cannot complete the report within the agreed timeframe due to some unforeseen circumstance preventing on time lodgement, you should immediately engage another auditor.
How do I lodge an auditor’s report?From 1 July 2019, your auditor will be completing and submitting your auditor’s report through the ‘Auditor’s Report Online’ portal. To confirm engagement of your auditor, you'll need to authorise the auditor through an email from the auditor requesting permission to lodge an Auditor’s Report on your behalf. When the report is completed and submitted by your auditor, you'll receive a copy via email.
Can the lodgement deadline be extended?All auditor’s reports are required to be lodged by the due date. The deadline will only be extended in exceptional circumstances that have existed over a period of time and can be supported by evidence. Reasons such as unaware of the requirement to lodge, forgetting to provide access to the auditor, allowing insufficient time for the auditor to complete the report, forgetting to lodge the report, the auditor was too busy to get it done in time or the auditor forgot to lodge the report, aren't acceptable.
What happens if the auditor’s report isn't lodged by the due date?If an auditor’s report isn't lodged by the due date or not lodged at all, and you don't have an acceptable reason. Fair Trading will contact you and take action based on your circumstances. Failure to lodge by the due date makes an individual or corporation a disqualified person under the Act and liable to disciplinary action. Alternatively, Fair Trading could issue a $550 fine for a late lodged audit by an individual or $1,100 for a corporation. A $1,100 fine applies for a late lodged statutory declaration by an individual or corporation. Failure to lodge an auditor’s report means you may not be able to renew your licence until you lodge. © State of New South Wales through the Office of Fair Trading, June 2020 Prev Commercial property Next Reducing the risk of data breaches in property agencies Which of the following individuals is required to have a North Carolina real estate license?In general, any person or business entity who transacts real estate brokerage business (including time share transactions) for compensation as an agent for another must first obtain a real estate license issued by the North Carolina Real Estate Commission.
Which of the following is true regarding the commercial listing contract provided by the North Carolina Association of Realtors?Which of the following is true regarding the commercial listing contract provided by the North Carolina Association of REALTORS®? It contains an option for the seller to reimburse the listing firm for marketing expenses if the property doesn't sell during the listing term.
Which of the following actions is the closing attorney's responsibility in a North Carolina real estate transaction?A North Carolina closing attorney calculates any necessary prorations, including taxes, interest, rental income, etc.
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All of these are true regarding trust accounts and the earning of interest on such monies EXCEPT
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