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Overview
You must keep full and accurate accounting records that:
- show the true position of all trust money received
- enable your trust accounts to be properly audited.
Your accounting records must show:
- who is entitled to the trust money
- details of each trust money transaction
- dates on which, or the period during which, each transaction took place.
Whenever a trust money transaction occurs, you must update your accounting records by the end of the next business day.
The Estate Agents (General, Accounts and Audit) Regulations 2018 set out the required:
- accounting documents
- procedures
- details to be kept.
If you are seeking technical or accounting information, or information not available on our website, ask your accountant or auditor for advice in the first instance.
Cash receipts journal
You must keep a trust account cash receipts journal, recording all money received daily.
This must include the:
- number of the receipt
- date the receipt was made out and, if different, the date on which the trust money was received
- amount of money received
- form in which the money was received; for example, cash, cheque or EFT
- name of the person from whom the money was received
- name and reference number or other identification of the person on whose behalf the money was received
- details clearly stating why the money was received
- details identifying the ledger account to be credited.
Cash payments journal
You must update a cash payments journal with all daily withdrawals from the account.
For payments made by cheque, this must include the:
- date, serial number and amount of the cheque
- name of the person the payment was made to; or, for a cheque made payable to an authorised financial institution, the institution’s name or BSB and the name of the person receiving the benefit of the payment
- name and reference number or other identification of the person on whose behalf the cheque was drawn
- details of the account in the trust ledger to which the cheque is to be debited
- details of the purpose for which the cheque was drawn.
For payments made by EFT, this must include the:
- date, reference number and amount of the transfer
- name of the person to whom the payment was made; or, for a payment to an authorised financial institution, the institution’s name or BSB and the name of the person receiving the benefit of the payment
- name and number of the account, including the BSB number, to which the amount was transferred
- name and reference number or other identification of the person on whose behalf the transfer was made
- details of the account in the trust ledger to which the payment is to be debited
- details of the purpose for which the payment was made.
Payments must be recorded in the order in which they were made.
Transfers
You must not transfer money between accounts in the trust ledger unless you are entitled to transfer the money for that purpose.
For example, you may transfer money from a landlord’s ledger to a commission ledger if the landlord has signed a property management authority that entitles you to claim commission.
You must record transfers in a journal kept exclusively for that purpose.
Entries in a transfer journal must include:
- the date of the transfer
- the amount transferred to and from each ledger account
- the names of all ledger accounts to be debited or credited, including identifying references
- details that clearly identify the purpose for which the money was transferred.
Trust ledger accounts
You must keep a ledger consisting of a separate identifiable account for each:
- person on whose behalf you hold trust money
- transaction for which you hold trust money.
The title of each ledger account must include the:
- name and address of your client
- purpose for which the money was received.
You must record the following details in the trust ledger account when you receive trust money, cheque payments, electronic funds transfer (EFT) payments or transfer of funds via journal entry:
- date of issuing receipt, receiving money, making payment, or funds transfer
- receipt, cheque, EFT payment or journal number
- name of the person the money was received or paid from, or ledger account the money was transferred to
- purpose for which the money was received, paid or transferred
- amount received, paid or transferred.
You must record transactions relating to trust money in the trust ledger account in the order in which they occur.
You must also ensure that a trust ledger account has a continuous running balance, showing the amount held.
Monthly reconciliations
You must balance your trust accounts and prepare statements each month. The balances you must reconcile are:
- cash journals
- ledger accounts
- accounts at your authorised financial institution.
The principal agent or officer in effective control must verify the reconciliation statements as true and accurate within 14 days of the end of each month.
Storage and back-up of records
You must keep trust records for at least seven years.
You must back up electronic records at least once a month. The principal agent or officer in effective control must keep back-up copies and a complete set of copies must be stored at a separate location.
Computerised accounting systems
If you use a computerised accounting system, it must:
- keep a record of any information created, amended or deleted that relates to the:
- seller’s or landlord’s name and address, reference number or other identification
- description of each transaction
- ledger account reference number or other identification for each trust ledger account
The record must show the details before and after this information was created, amended or deleted
- not accept entries of transactions that result in a debit balance in a trust account, unless there is a chronological record of the details of the change that can be produced on request
- not be able to delete a trust ledger account unless the balance is zero and all outstanding cheques have been presented. When the account is deleted, the system must retain a permanent copy
- not be able to amend the details of a transaction already recorded, except by recording a separate transaction that makes the amendment
- require input in every field of a transaction data entry screen that receives information required by the Act and the Regulations
- be backed up at least once a month. Each back-up copy must be retained by the agent in charge of the business or the officer in effective control, and a complete set of the back-up copies must be kept in a separate location.
Using an estate agent trust accounting software package can make it easier to comply with many of these requirements.
General accounting software packages may also be of some assistance; whichever system you use, it is your responsibility to ensure you comply with the Act and Regulations.
Register of securities
If you hold securities, documents of title or receipts for trust money on behalf of another person, you must keep a register of these.
The register must show:
- the date the security, document of title or receipt was received
- a description of the security, document of title or receipt
- the value or amount of the security or money deposited
- the name of the person the security, document of title or receipt is held for
- the date you delivered the security, document of title, or receipt to another person, and the name of the person you gave it to
- the reason the security, document of title or receipt is being held
- if the security, document of title or receipt is held jointly with another estate agent, the name under which they operate an estate agency business.
Deficiencies in a trust account
You must notify us, the agency director and your auditor within three business days of becoming aware of a deficiency in a trust account or trust ledger account.
This notification must include:
- the date on which the deficiency occurred
- the amount
- the reason it occurred
- any action taken to restore it.
You do not need to notify us if the deficiency was:
- accidental, or caused solely by an error by an authorised financial institution, and
- rectified within two business days after you became aware of it.
Unclaimed money
If you cannot identify the person entitled to trust money, those funds may be considered unclaimed money under the Unclaimed Money Act 2008.
For information on what to do with unclaimed money, visit the State Revenue Office website.