City Residential Real Estate Pty Ltd and Riad Mindraoui - Court action

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4 March 2014
Court actions

City Residential Real Estate Pty Ltd (ACN 126 085 373) and its director and Officer in Effective Control, Mr Riad Mindraoui, must pay $7500 after failing to properly supervise the agency’s trust accounts.

VCAT found that as the officer in effective control, Mr Mindaroui failed to supervise the actions of his son, Nadim Mindraoui, who was working as the agency’s accounts manager when he misappropriated approximately $160,000 from its trust accounts between December 2010 and April 2012.

The tribunal ordered that City Residential Real Estate pay $2500 and Mr Mindraoui senior $5000 to the Victorian Property Fund.
VCAT also ordered:

  • City Residential Real Estate Pty Ltd to engage a qualified auditor to perform six-monthly audits of its trust accounts and provide copies to Consumer Affairs Victoria
  • Mr Riad Mindraoui and staff who handle trust account money to complete training in trust account management as part of a conduct compliance program.

It is an offence under the Act for estate agents to fraudulently convert money they receive in relation to a real estate transaction, to their own use.

Under the Act, the principal agent or officer in effective control is responsible for the acts of their agents’ representatives (anything done or not done) if those actions:

  • were within the scope of the agents’ representative’s authority
  • benefit, or were intended to benefit, the agent or agency.

The principal agent or officer in effective control is personally liable for any money the agent’s representative receives on behalf of the agency.

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