Twenty real estate agents, from Balmain, Rozelle, Baulkham Hills, Coogee, Bondi Beach and other parts of Sydney, have been fined a total of $173,500 and eight have lost their licences for failing to comply with strict rules around trust accounts.
The agents, who failed to lodge their trust account audits for 2019-20, raised a “major red flag” as it could indicate they have something to hide, executive director of investigations and enforcement at NSW Fair Trading Valerie Griswold said.
“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,” Ms Griswold said.
“Trust accounts consist of funds belonging 100 per cent to consumers, so it’s critical the agents managing them stick to the rules,” Ms Griswold said.
The agents were each fined up to $11,000; eight had their licences cancelled and nine are now disqualified from being involved in the direction, management or conduct of the business of a licensee until the outstanding trust account audits are returned.
“We’re not talking about small amounts here – these 20 agents alone held a combined total of $2.95 million in their trust accounts, and it is crucial this money is being handled correctly at all times,” Ms Griswold said.
Trust account fraud, where an agent steals money from a rental bond or funds they are given to hold in trust for property transactions, is the number one offence real estate agents are prosecuted for in NSW, she added.
Agents can request an internal review of disciplinary action and there are no allegations at present that the 20 agents engaged in any fraud. The regulator is also considering penalties for another 35 real estate agents, who returned their trust account audits late.