16 June 2023

Just days after a Queensland agent was sentenced to eight years in jail for trust account fraud, a Victorian agent has received a 12-month prison sentence for the misuse of funds belonging to their clients.

Consumer Affairs Victoria (CAV) has reported that in addition to the 12-month prison sentence handed down by the Country Court, the former agent has been issued with a two-year Community Corrections Order.

The former agent’s breach of the Estate Agents Act 1980 was based on causing almost $1.6 million in trust account deficiencies and the fraudulent transfer of around $776,000 in trust funds for their own use.

CAV reports further on the issue:

Real estate agent jailed for mishandling trust money

A former estate agent who mishandled his clients’ trust account funds for personal use was sentenced to 12 months in prison and a two-year Community Corrections Order in the County Court today.

Richard Michael Hayden, 56, of Torquay, pleaded guilty on 5 June to three offences under the Estate Agents Act 1980. These included two charges for causing almost $1.6 million in trust account deficiencies and one charge for fraudulently transferring around $776,000 in trust funds for his own use.

The court heard how Mr Hayden used these funds to pay for international holidays, entertainment, clothing, and medical costs.

Director of Consumer Affairs Victoria Nicole Rich said the outcome serves as a strong reminder that estate agents found doing the wrong thing will face serious consequences.  

Consumer Affairs Victoria launched court proceedings against Mr Hayden following complaints from consumers between November and December 2018 who reported deposits not being paid after settlement or cancellation of a contract of sale.

Mr Hayden was the Director of Skyline Developments Pty Ltd, which traded as Ballarat agency Hayden Real Estate, when he committed the offences.

Estate agents and agents’ representatives must keep any consumer moneys held temporarily, such as property sales deposits and rental payments, in a trust account to ensure the funds are protected. They must not use those funds for general business expenses or personal use.  

Consumer Affairs Victoria takes a zero-tolerance approach to real estate agents found to be breaking the law, and monitors compliance through random and annual auditing of trust accounts.  

Victorians who have lost money due to Mr Hayden’s actions can make a claim for compensation against the Victorian Property Fund by visiting the Victorian Property Fund page.

Quotes attributable to Director for Consumer Affairs Victoria, Nicole Rich

“Consumer Affairs Victoria will continue to hold real estate agents who misuse money to account, to protect buyers, vendors, and the integrity of the wider real estate industry.”   

“Victorians deserve to know their money can be trusted with real estate agents and this outcome serves as a serious warning to agents doing the wrong thing.”