The NSW Fair Trading crackdown targeted real estate agents who failed to lodge their trust account audits for 2019/20, leading to disciplinary action being taken against 20 real estate agents.
Each agent was fined up to $11,000, while eight had their licenses cancelled, and a further nine are currently disqualified from being involved in the direction, management or conduct of the business of a licensee until the outstanding trust account audits are returned.
The 20 agents held a combined total of $2.95 million in their trust accounts, and although no allegations of fraud were brought forward, the regulator notes that failure to lodge an audit is a stand-alone offence and a “major red flag” for agents hiding something.
“Trust account fraud is the number one offence real estate agents are prosecuted for in NSW,” said Valerie Griswold, NSW Fair Trading executive director of investigations.
“In the past we’ve seen real estate agents using trust account funds for gambling, alcohol and drugs – in some cases spending hundreds of thousands of dollars.
“Trust accounts consist of funds belonging 100 per cent to consumers so it’s critical the agents managing them stick to the rules.”
Fair Trading’s consumer, building and property unit undertook the compliance operation in conjunction with Fair Trading’s disciplinary action unit to address the audit failures.
According to the regulator, further action is still being considered against 35 additional real estate agents who returned their trust account audits late.
The 20 agents subject to disciplinary action from NSW Fair Trading include:
- Deakin Industrial Realty Pty Ltd in Sydney
- Future Partners Austral Pty Ltd at Austral
- John Dunnachie Pty Ltd at Baulkham Hills
- Novus Investment Group Pty Ltd in Sydney
- Oceanwide Property Group Pty Ltd in Sydney
- Palomaohana Pty Ltd trading as James Estates Property Agents at Balmain
- The IBW Empire Pty Ltd at Rozelle
- The Success Property Group Pty Ltd at Burwood
- Amazing Grace Australia Pty Ltd at West Ryde
- Amazing T Investments Pty Ltd as Topland Property Pty Ltd at Castle Hill
- Australian Prime Realty Pty Ltd at Dover Heights
- Auston Grand Realty Group at Castlereagh
- Australian Executive Apartments Pty Ltd at Coogee
- CVG Home Inn Pty Ltd at Sydney
- Bondi Beach Rentals Pty Ltd at Bondi Beach
- Healy Enterprises Pty Limited at The Entrance
- IT Property Agents Pty Ltd at Caringbah
- Key Chain Real Estate Pty Ltd at Hurstville
- [email protected] Pty Ltd at Dooralong
- ANG (Aust) Pty Ltd at Minto
To date, only three of the real estate agents, Deakin Industrial Realty Pty Ltd, Novus Investment Group Pty Ltd and The IBW Empire Pty Ltd, have requested an internal review of the disciplinary decision issued to them.
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.