Victoria steps up enforcement of property trust-account audits

Victorian property deposits, rent and maintenance money are at the centre of a new compliance push targeting estate agents and conveyancers who fail to arrange required trust-account audits.

Consumer Affairs Victoria announced on Thursday that it was stepping up enforcement, warning that missed audits can point to wider management failures that put client funds at risk.

Trust accounts are separate accounts used to hold money that belongs to clients rather than the agency or conveyancing business. In residential property transactions, that can include a buyer’s deposit, rent collected for a rental provider and money intended for maintenance or other authorised expenses.

The regulator said its investigations into trust-account audit breaches had produced more than $400,000 in fines since 2021. More serious matters can be taken to the Victorian Civil and Administrative Tribunal for disciplinary action.

Licence suspension is now available

Recent legal changes have given the Business Licensing Authority power to suspend an estate agent’s or conveyancer’s licence when required trust-account audits have not been completed.

Consumer Affairs Victoria said disciplinary proceedings can also result in cancellation, suspension or conditions being imposed on a licence. It named several agents and conveyancers currently facing legal action over alleged failures to submit audits, with some alleged periods extending across multiple financial years.

The allegations have not been determined merely because proceedings have commenced. The broader message for the industry is that lodging an audit is not an optional administrative task.

Estate agents have three months from the end of the financial year to arrange and lodge their trust-account audit. Conveyancers have seven weeks, according to Thursday’s announcement.

Why the audit matters to consumers

An audit does not guarantee that a property transaction will be free from error or fraud. It provides an independent check of how a business has received, recorded, held and paid out money entrusted to it.

That distinction matters because a home deposit can represent years of savings, while rental trust accounts may process money belonging to many tenants and rental providers each month.

A missed deadline does not automatically mean client money has disappeared. Consumer Affairs Victoria nevertheless says failure to arrange an audit is serious and can indicate poor systems or inadequate records.

The enforcement action should encourage agencies and conveyancers to resolve outstanding compliance issues before consumers are exposed to a larger problem.

Checks buyers and sellers can make

Consumers do not need to become trust-account experts, but basic record keeping remains important.

A buyer paying a deposit should confirm the recipient and account details through a trusted channel rather than relying solely on an emailed payment instruction. Unexpected changes to bank details should be checked by calling a known telephone number for the agency, conveyancer or solicitor.

Buyers should retain the contract, transfer confirmation and deposit receipt. Sellers should ask their representative where the deposit will be held, when it can be released and what authorisation is required.

Rental providers should review regular statements from their managing agent and query unexplained deductions, delayed transfers or maintenance payments they do not recognise. Renters should keep receipts or transaction records showing that rent was paid to the nominated account.

The vast majority of property professionals meet their obligations, Consumer Affairs Victoria said. The enforcement push is intended to identify businesses that do not and reinforce the fact that client money must be managed separately, accurately and transparently.

What it means for you

• Victorian deposits, rent and maintenance funds held in trust are receiving closer regulatory scrutiny.
• An agent or conveyancer can now face licence suspension for failing to complete required audits.
• Verify any unexpected change to payment instructions before transferring property money.
• Keep contracts, receipts and transaction records until the sale, settlement or tenancy issue is fully resolved.