Consumer Affairs Victoria warns against failure to audit trust accounts
/12 September 2023
In a media release today, Consumer Affairs Victoria (CAV) has highlighted the consequences faced by agencies that fail to conduct audits of their trust accounts within the required annual period. CAV uses the example of recent legal action being taken against an agency after its directors failed to audit their trust account over several years, despite receiving reminders, a warning and infringement notices from CAV.
Agencies operating within Victoria must audit their client trust accounts within three months after 30 June every financial year.
CAV reports on the issue as follows:
Hakan Ali and Charter Lane Pty Ltd to face legal action
An inner-city estate agency and its Officer in Effective Control, Hakan Ali, are facing legal action after not auditing their trust account over several years.
Despite receiving reminders, a warning and infringement notices from Consumer Affairs Victoria (CAV), Charter Lane Pty Ltd and Ali, 56, of Greenvale, didn’t submit the reports.
Between July 2018 and September 2021, our investigators contacted the agency and Ali 12 times. Ali continued to assure CAV he would provide the audits and required trust money payment records but failed to do so, showing an ongoing disregard for strict regulatory rules that protect consumers.
We allege that Charter Lane and Ali failed to:
submit annual audits
record trust account payments
act fairly, honestly and to the best of their knowledge and ability; and
exercise all due skill, care and diligence.
Estate agents must audit their client trust accounts within three months after 30 June every financial year.
‘If companies or agents fail to meet their responsibilities under the Estate Agents Act, we will act’, said Consumer Affairs Victoria’s Director Nicole Rich.
A directions hearing is scheduled for 18 September at the Victorian Civil and Administrative Tribunal.
