What legislation sets out the requirements of trust accounting for real estate in NSW?
the Property and Stock Agents Act 2002
Licensees under the Property and Stock Agents Act 2002 (the Act) must hold clients’ funds in a trust account.
What is the purpose of a trust account in real estate NSW?
The purpose of a trust account in real estate Trust accounts exist to protect everyone involved in the real estate transaction. They are heavily governed by legislation and failure to comply can result in hefty penalties and even loss of licence.
Who may Authorise the withdrawal of funds from a real estate trust account?
Only a licensee in charge may ‘authorise’ the withdrawal of money from a trust account. An agent may not authorise the withdrawal of money from a trust account unless the agent holds a Class 1 licence and is currently appointed as a licensee in charge.
What are the different types of trust accounts in real estate NSW?
Money must be held with an authorised deposit-taking institution.
- Different types of Trust Funds include:
- – General Trust Money.
- – Controlled Money.
- – Transit Money.
- – Power Money.
- – Written Direction Money.
What are the 2 methods of withdrawing disbursing money from a trust account?
Trust money can only be dispersed in accordance with a direction given by the person on whose behalf the money is been held. Further, trust money can only be withdrawn by cheque or electronic funds transfer.
Why would you open a trust account?
A main reason for creating a trust is to control who receives your assets. You can assign assets through a trust during your lifetime or at your death (via your will). For instance, you may want your trust fund to provide for a family member’s education or to help with the purchase of a first home.
Can an assistant agent can disburse funds from a property services trust account?
A: Yes, but only if a licensee in charge has first authorised the withdrawal of the money from the trust account.
What types of withdrawals would be deducted from the trust account?
Trust money can only be dispersed in accordance with a direction given by the person on whose behalf the money is been held. Further, trust money can only be withdrawn by cheque or electronic funds transfer. Regulation 65 of the Regulations governs the withdrawal of trust money for the payment of legal costs.
Do trust accounts need to be audited?
Trust account audit requirements Under the Act, the records of conveyancers’ handling of trust money must be audited. The following people must submit an audit of their trust account to NSW Fair Trading, if they received or held trust money during the financial year ending 30 June of each year: a licensee.
Who must submit a trust account audit to NSW Fair Trading?
The following people must submit an audit of their trust account to NSW Fair Trading, if they received or held trust money during the financial year ending 30 June of each year: a personal representative of a licensee. When must the audit be submitted?
Do I need to lodge audit results with Fair Trading?
From 1 July 2019, you must lodge all audit results with Fair Trading. This is a change from previous years when only qualified audits needed to be lodged. Results of trust account audits need to be lodged via the Auditors Report Online portal (accessible at the bottom of this page). We no longer accept paper-based auditor reports.
How do I notify Fair Trading after closing a trust account?
A licensee must, within 14 days after closing a trust account, either: notify Fair Trading online through Service NSW, or complete the Green Form and submit it to NSW Fair Trading. A copy of the Green Form can be obtained by clicking on the link shown below.
What is the purpose of the NSW Fair Trading notification system?
This system is used to notify NSW Fair Trading of your intention to open, register or close a General trust account kept with an approved financial institution.