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Authorised Financial Institutions
Estate agents' trust accounts can only be maintained by authorised financial institutions. By arrangement with those institutions, interest on moneys in estate agents' trust accounts must be paid to the Victorian Property Fund. Interest on estate agents' trust accounts cannot be paid to any other party, nor can interest be credited to trust accounts.
The following financial institutions have been declared an authorised financial institution under section 61(1) of the Estate Agents Act 1980:
- Australia and New Zealand Banking Group Limited
- Bank of Cyprus Australia Limited
- Bank of Queensland Limited
- Bendigo and Adelaide Bank Limited
- Commonwealth Bank of Australia Limited
- Hume Building Society Limited
- Macquarie Bank Limited
- MECU Limited
- National Australia Bank Limited
- St. George Bank Limited
- WAW Credit Union Co-operative Limited
- Westpac Banking Corporation
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Opening or Closing a Trust Account
Estate agents are required to give written notification to Consumer Affairs Victoria of any trust account opened or closed. Notice must be given within 14 days of opening or closing the account. Trust accounts must be in the name of the agent and as such, the name of the licensed corporation, sole trader or partners (as applicable) must be included in the trust account title.
Upon opening a trust account, estate agents must appoint an auditor (for their accounts of trust money) before receiving or holding trust money.
To give notice of opening or closing a trust account, complete a Notice of opening a trust account form (PDF) or a Notice of closing a trust account form (PDF) and send it to Consumer Affairs Victoria.
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Appointing an Auditor
To be qualified to act as an auditor of estate agents' accounts of trust money a person must be an "approved auditor".
An "approved auditor" means a person who is a member of CPA Australia, the National Institute of Accountants or the Institute of Chartered Accountants in Australia, meets the requirements of those bodies to practice as a public accountant and has obtained a relevant tertiary qualification.
Estate agents must appoint an auditor before receiving or holding trust money.
Where an auditor resigns, dies or otherwise in unable to continue as an auditor, an estate agent must appoint a new auditor within one month of becoming aware of that fact.
Estate agents are no longer required to give notice to Consumer Affairs Victoria of auditor appointments or changes. Persons meeting the "approved auditor" criteria require no formal approval to act or to be appointed as an auditor.
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Auditor's Reports
Where an estate agent has received or held trust money during the previous financial year, the agent must cause his accounts of trust money to be audited by an appropriately qualified person.
The audit must take place within three months after 30 June of each financial year that trust money is received or held. The auditor's report must be completed in the same time frame, with a signed copy of the report delivered to the estate agent, and a further copy sent to Consumer Affairs Victoria.
Should an estate agent be subject to approval of a variation of the year-end date for the audit period, the trust account audit and auditor's report must be completed within three months of the altered audit year-end date.
An Auditor's Report form (PDF) must be in the form approved by the Director of Consumer Affairs Victoria.
Receipt form declarations and statements of moneys, securities or deposit receipts held, and ledger account balance prints do not need to be submitted with the report. Copies of such documentation must be retained on the auditor's file.
Final audit report (for business that ceased during financial year)
Where an agent has ceased to carry on business as an estate agent the accounts of trust money must be audited within three months of the cessation of business.
For the purposes of a final audit the date of "cessation of business" is construed to be the day on which all trust moneys have been disbursed from the estate agent's trust accounts.
Unclaimed monies are held to be trust moneys until such time as they are disbursed.
An Auditor's Report form (PDF) must be in the form approved by the Director of Consumer Affairs Victoria.
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Variation of Audit Date
An estate agent may apply in writing to Consumer Affairs Victoria to fix a date other than 30 June as the date to which trust accounts are to be audited. The new date cannot be greater than twelve months after the date of the agent's previous auditor's report. When permission is granted to vary the audit date, subsequent auditor's reports must be completed within three months of the new annual audit date.
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Real Estate Audit Inspection Report 2006/2007
In October 2005 CAV commenced a real estate inspection program which monitors estate agents’ compliance with the Estate Agents Act. This trust account auditing program is specifically designed to:
- detect agent non-compliance
- increase the level of legislative awareness among estate agents
- identify any operational or policy problems
- ensure that trust accounts are operating in accordance with the legislation
- identified target areas where CAV believes there are potential risks to consumers’ trust monies.
Agents who breach the regulations risk loss of licence and severe civil or criminal penalties.
The 2006/2007, 515 inspections were completed and several inspections have been referred for investigation as a result of serious trust accounting breaches. For further information download:
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