Licensees who receive money for real estate transactions are required by law to have a trust account to pay that money into.
Trust accounts for companies and licensee partnerships
If you are an agent working as a company, the company can operate the trust account and any agent working for the company can pay money into it. If you are in partnership with other licensees the partnership can operate the trust account.
Residential property management is not covered by the Real Estate Agents Act
The information on this page relates only to real estate transactions. Agents or agencies should maintain separate trust accounts for property management transactions and these should be audited according to the relevant professional standards. If any irregularities in property management accounts or transactions are found, the auditor has to report them to us.
Money must be held for 10 working days
All money you receive for a real estate transaction must be held in the trust account. It cannot be paid to any person for a period of 10 working days after the date it is received.
The money can be released before the 10 working days if authorised by all parties or a court order.
You can use a third party trust account
All money you receive for any transaction in your capacity as an agent must be paid into a designated trust account but you do not have to actually operate that account yourself.
However, if you switch from using your own account to a third party account you must inform us and your auditor.
Operating trust accounts
Trust accounts must be audited
Trust accounts that hold money related to your work as a licensee must be audited.
You must pay out (including any interest) to the person entitled to it
All money you have received for a real estate transaction must be paid to the person who is lawfully entitled to that money, or in accordance with their instructions. It must be held in the trust account until it is paid out. You are expected to account for all trust money you have received.
Banks do not normally pay interest on trust funds. If any interest is earned on trust account funds it must be paid to the person entitled to it.
Funds must be kept for the right amount of time
It is essential that the funds are kept for the correct length of time. The money can only be paid out earlier than 10 working days from the date received if early payment is authorised by all parties to the transaction or if a court order is made ordering early payment. Be aware that weekends and public holidays do not count as working days.
If you are closing a trust account or making it inactive
You should inform us and your auditor if you intend to close a trust account or make it inactive.
More information on trust accounts