Inspectors from Consumer Affairs Victoria will be checking more estate agent trust accounts, more often, for discrepancies.
Victorian estate agents held 5,188 trust accounts worth $2.43 billion at the end of 2019.
Inspectors are now conducting random desktop inspections of estate agents’ trust accounts, searching for inconsistencies that may point to misuse of trust money, in addition to their usual on-site inspections.
These desktop checks will significantly increase the amount of trust account inspections undertaken each year.
Estate agents will be required to produce documents to prove trust money is being handled appropriately, with inspections conducted on top of the yearly trust account audits.
There are strict laws surrounding how estate agents should keep and file money they receive.
Advance funds must be deposited into an estate agent’s trust account, and records must be kept showing details of each trust money transaction.
Acting Director of Consumer Affairs Victoria Michelle Osborne said failing to handle trust account money appropriately may result in the delay or failure of property purchases, causing emotional and financial stress for those involved.
“Consumer Affairs Victoria takes the misuse of trust account money seriously and has zero tolerance for estate agents who do so,” said Ms Osborne.
“Good agents who have done nothing wrong have nothing to fear from the new approach.”
Failing to appropriately manage trust money is a significant offence, with estate agents facing fines of up to $82,000, or 10 years’ imprisonment.
During 2018-19, Consumer Affairs Victoria conducted 425 trust account inspections for compliance with relevant laws and processed more than 4,300 trust account audits.
Increasing the number of trust account inspections will allow Consumer Affairs Victoria to act faster to identify estate agents who have broken the law.