Former WA real estate agent fined for personal use of trust account funds
20 February 2023
Western Australia Consumer Protection has published a recent court outcome on its website, outlining the misuse of trust account funds by a former East Perth agent. The former agent’s misconduct involved a deposit from a real estate sale being transferred to the general agency account, before being sent to two personal bank accounts: a personal credit card account and a home loan offset account.
Disciplinary action in the form of almost $4,000 in fines was administered by the Perth Magistrates Court for the unlawful withdrawal of funds from the agency’s trust account.
WA Consumer Protection reports on the issue as follows:
Fine for transferring real estate trust funds to personal accounts
Former Director fined $2,500 for unauthorised transfer of trust account funds
Deposit from real estate sale contract transferred to agency operating account
Funds then sent to two personal bank accounts
A former Director of an East Perth real estate agency has been ordered to pay a total of almost $4,000 by the Perth Magistrates Court for unlawfully transferring funds from the agency’s trust account that were later deposited into his personal accounts.
The man, who was granted a spent conviction, was fined $2,500 on 14 February 2023 after pleading guilty to breaching the Real Estate and Business Agents Act. He was also ordered to pay $1,472.30 in costs.
Commissioner for Consumer Protection Trish Blake said such actions by the former Director were a serious breach of faith that undermines confidence in the industry. “Funds held in a real estate agency’s trust account are not to be used to pay for business or personal expenses,” Ms Blake said.
IMAGE: TWITTER
During the process of finalising the sale of his agency in December 2020, a $5,000 deposit relating to an offer to purchase a property north of Albany was placed into the agency’s trust account by the potential buyers.
A few weeks later and without authorisation, the man transferred the $5,000 into the agency’s operating account. He then withdrew $13,593.87 from the operating account and deposited the funds into both his personal credit card and home loan offset accounts.
The buyers’ purchase of the property failed to go through and they were unable to be refunded their $5,000 deposit due to the unlawful transfer. They were eventually compensated by the Fidelity Guarantee Account, which was later reimbursed by the man before sentencing.
The agency surrendered its licence and triennial certificate in May 2021 and is no longer operating.
Commissioner for Consumer Protection Trish Blake said such actions by the former Director were a serious breach of faith that undermines confidence in the industry.
“Funds held in a real estate agency’s trust account are not to be used to pay for business or personal expenses,” Ms Blake said.
Disciplinary action in the form of almost $4,000 in fines was administered by the Perth Magistrates Court for the unlawful withdrawal of funds from the agency’s trust account.
Image: Richard Wainwright/AAP PHOTOS
“The money remains the property of the agency’s clients until the sale of the property is completed, so to make unauthorised and illegal withdrawals is a serious betrayal of trust.
“The laws that cover the use of trust account funds are in place to protect buyers and sellers involved in real estate transactions and must be obeyed. If not, the law breakers may face prosecution and their licence could be put at risk.”
More information on the obligations of real estate agents, sales representatives and property managers is available on the Consumer Protection website or enquiries can be made by email consumer@dmirs.wa.gov.au or by calling 1300 30 40 54.