Operate a special trust account for the sale of a property
You may only use a special trust account for the sale of a property.
In certain circumstances, you can invest trust money into this type of account.
You may only use a special trust account if you:
- are transacting the sale of real property
- will be holding money in trust for more than 60 days
- have a written request from all parties that you invest the money.
In all other circumstances, you must use a general trust account.
Having a trust account
You must follow the normal rules for opening or closing your account.
Every year, you must lodge an audit report for each account. You can use a single audit report for several accounts.
Trust account receipts
Anyone who keeps a trust account must have:
- a register of trust account receipt forms
- all receipts in duplicate (such as carbon paper duplicates).
On each trust account receipt, you must include:
- a title that says ‘Agents Financial Administration Act 2014 – Trust Account Receipt’
- a unique receipt number (with all receipts in consecutive order)
- the name of the trust account holder (principal licensee)
- the words “office copy” or “duplicate copy” on the second copy of each receipt.
Receiving monies
You can only use a special trust account when you receive a payment toward a property sale.
When you receive trust money to go into a special trust account, you must:
- transfer it into the trust account
- issue a trust account receipt
- keep the duplicate copy of the receipt for your records.
Make sure the information is clear and legible on the duplicate copy.
You must follow these steps as soon as you:
- receive money in person
- realise you have received an electronic payment.
When you fill out a receipt, you will need to:
- include your name
- identify the payee—this might be the seller or a service business
- briefly describe the reason why you received the money
- identify how much money you received in numerals
- identify how you received the money (such as cash, cheque, credit card or electronic transfer).
You can fill out a trust account receipt manually or electronically. If you make a hard copy of a receipt (such as a manual receipt or a printout), then you must sign that copy.
Withdrawing and distributing
For a withdrawal from a special trust account, you must:
- have written direction from all parties
- follow the terms of your agreement with the parties
- pay the seller their share of the proceeds first
- pay any other parties before withdrawing your own fees or commissions.
You must distribute all trust money directly from the trust account. It is illegal to transfer money to recipients via a general account.
If your bank does not allow this, you can:
- negotiate with your bank to allow EFT functions
- consider changing banks
- pay by cheque from the trust account.
Your records
You must keep your trust account records for 5 years.
Your trust account records must include:
- a deposit book of trust account deposit forms in duplicate
- a cash book
- a journal of consecutively numbered folios
- a ledger.
You must also keep:
- full and accurate accounts of all money you pay or receive for a transaction
- all books, accounts and records in a way that is easy to audit.