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A real estate agent has been suspended for nine months after using trust account funds to indirectly pay his tax debt.
Ian Hugh Sargent, trading as WA Prestige Properties in Subiaco, was reprimanded by the State Administrative Tribunal (SAT) for transferring $75,000 from his agency's trust account into its operating account in May 2012.
On the same day, $71,312 was withdrawn from the agency's operating account to pay a debt to the Australian Taxation Office.
The funds used included $50,000 that was paid to the agency as a deposit relating to a property purchase. The sum was the equivalent to the commission owing to the agent. However, the sale did not go ahead and the offer was withdrawn.
The SAT found that the agency had contravened the WA Real Estate and Business Agents Act by receiving a commission prior to settlement of the property, making an unauthorised withdrawal from their trust account and paying trust account funds to a person not lawfully entitled to receive them.
The tribunal took into consideration fact that the withdrawal was an “isolated event” and the agent had not previously been subjected to any disciplinary proceedings.
Acting commissioner for Consumer Protection, David Hillyard, said the incident was a serious breach of the law with serious consequences for the agent and his business.
“Real estate agents who illegally pay commissions to themselves prior to settlement are playing with fire as these sales can often fall through,” Mr Hillyard said.
“Also, agents should never use trust funds to pay for operating costs in their business and regular audits will eventually uncover any discrepancies."
The nine-month suspension begins today, 1 June 2016.
[Related: Trust account fraud a collective problem, says franchise boss]
- <p>I agree with 1918bu and Roger. He should have lost his licence. Many questions are raised from this. Reflects he appears to have spent GST and staff tax deductions so what happens next time he is running short?. Was he awaiting $75K of commissions to settle to pay the money back?<br>Considering approx 90% of agents in WA are on commission only, and, the apparent downturn in the WA market I can't see how he could ever recover such a shortfall. What about super payments that are coming up?</p>0
- <p>1918u I agree 100%. I assume the agent has actually refunded the deposit. Three months suspension is a joke and will not act as a deterrent to anyone else considering going down this path. There are numerous factoring companies out there that will advance commission payments. He could have chosen that option legally.</p>0
- <p>I disagree. 9 months is along time to be out of Realestate if your an agent. You practically need to fresh. <br>The money's were not unattainable and obviously returned. If we went through your 36 years of dealing in Realestate in qld I'm sure there will be a issue or to that people would agree you should loose your license over </p>0
- <p>I have been a practicing real estate agent in Queensland for almost 36 years and cannot really believe the leniency of this penalty. A Trust account is a TRUST account, and the money held in that trust account cannot be touched by the agent until the parties to the contract instruct him/her to remove it!</p><p>As far as I am concerned, this agent should have lost his real estate license, and been fined severely!</p>0
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