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The former director of a Perth-based real estate agency has been fined $2,500 and ordered to pay $1,472 in costs for depositing trust account funds into his personal account.
The agent, who was not named by Consumer Protection, was granted a spent conviction for the act, which saw him transfer $5,000 into his agency’s operating account before withdrawing more than $13,000 from the operating account and depositing this money into both his personal credit card and home loan offset accounts.
This all occurred while he was in the process of finalising the sale of his agency and followed the placing of a $5,000 deposit related to an offer to purchase a property north of Albany into the agency’s trust account by potential buyers.
According to Consumer Protection, the buyers’ purchase of the property failed to go through, and due to the unlawful transfer, they were unable to be refunded their deposit.
The Western Australia consumer agency indicated that the buyers were compensated by the Fidelity Guarantee Account, which was later reimbursed by the former director prior to sentencing.
Weighing in on the matter, commissioner for Consumer Protection Trish Blake said the former director’s actions “were a serious breach of faith that undermines confidence in the industry.”
She stressed that “funds held in a real estate agency’s trust account are not to be used to pay for business or personal expenses.”
“The money remains the property of the agency’s clients until the sale of the property is completed, so to make unauthorised and illegal withdrawals is a serious betrayal of trust.
“The laws that cover the use of trust account funds are in place to protect buyers and sellers involved in real estate transactions and must be obeyed. If not, the lawbreakers may face prosecution and their licence could be put at risk,” she outlined.
According to the report, the agency is no longer operating, having surrendered its licence and triennial certificate in May 2021.
ABOUT THE AUTHOR
Grace Ormsby
Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.
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