QLD Fair Trading: Sunshine Coast real estate director and company fined for improper use of trust money
/22 August 2022
Queensland Fair Trading has reported this month that a Sunshine Coast real estate director and his company have been fined $13,000 in the Maroochydore Magistrates Court (18 August 2022) for using trust money to pay business expenses and to buy another business.
Fanghua Lin, the principal licensee, and the corporation Sweetizens Pty Ltd pleaded guilty to wrongfully converting trust money for their own uses, after an investigation by the Office of Fair Trading (OFT).
The Court heard that in July 2021, Mr Lin made two unauthorised transfers of trust money totalling $70,000 into a personal business account that was shared with another director of the business.
Mr Lin then transferred the money to himself and used it to assist in the purchase of another business. Mr Lin later repaid the funds into the trust account.
A further $15,000 trust money was used at a later date to pay the company’s business expenses and it was paid back shortly afterwards.
Fanghua Lin plead guilty and was fined $10,000 and disqualified from working in the industry for two years. The company Sweetizens Pty Ltd was charged separately and fined $3,000.
Magistrate Matthew McLaughlin noted that Mr Lin used client’s money that they thought was safe and it was an enormous breach of trust. Magistrate McLaughlin also said that real estate agents must know that trust accounts are not to be used as a slush fund.
Commissioner for Fair Trading Victoria Thomson said a trust account is not there for agents to use as a backup to help them meet their other financial obligations.
“Trust money does not belong to agents. It can’t be borrowed, used to prop up your business or for any other purpose outside of its authorised use,” Ms Thomson said.
“The OFT will investigate and seek penalties for those who deal with trust money inappropriately”.
The Trust Accounts Guide, produced by OFT, provides agents with information about their trust account obligations.
If you believe an agent has been mishandling trust money you can lodge a complaint with the OFT online from its website or call 13 QGOV (13 74 68).
QLD Fair Trading has reported on similar trust fund misuse this year, occurring in Rainbow Beach and the Broadbeach area.
