On this page:
Overview
By law, if you receive money in advance from a client, you must deposit it into a trust account held with an authorised financial institution.
This money may include:
- sales deposits
- rent
- fees for advertising or maintenance.
You may open one or multiple trust accounts, depending on your agency’s needs.
We may inspect your trust account records, and there are penalties of up to 120 penalty units for breaches of the law. For more information on penalty unit amounts, visit the Office of the Chief Parliamentary Counsel website.
What is trust money?
The table below summarises two types of payments: those that are:
- considered trust money and therefore must be deposited in a trust account
- not considered trust money and can be deposited in a general business account.
|
Trust account
|
General business account
|
|
Payment for or deposits on:
- sales of land, buildings and accompanying chattels, including ‘off the plan’ sales
- sales of businesses
- shares in a company that entitles the shareholder to occupy land, buildings and accompanying chattels
- options to purchase land, buildings and accompanying chattels
- options to purchase shares in a company that entitles the shareholder to occupy land, buildings and accompanying chattels
Rental bonds or security deposits on:
- commercial, industrial or storage land, buildings and accompanying chattels, unless the lease agreement specifies another arrangement agreed to by the parties to the lease. Note: security deposits for retail premises (as defined in the Retail Leases Act 2003) do not have to be placed in a trust account. For more information, visit the Retail tenants and landlords section of the Victorian Small Business Commissioner website
- residential land, buildings and accompanying chattels, prior to lodgement of the bond with the Residential Tenancies Bond Authority
- holiday accommodation for more than 90 days
Rent on:
- residential, commercial, industrial or storage leased land, buildings and accompanying chattels
- residential accommodation for a rental period of more than 90 days
Fees received in advance for advertising of:
- land, buildings and accompanying chattels for sale or lease
- businesses for sale
Costs of outgoings and utilities (for example, council rates, water, electricity, payments to tradespeople, insurance) relating to land, buildings and accompanying chattels for sale or lease
|
Payments from trust accounts where the estate agency is entitled to receive them, such as:
- commission
- management fees
- disbursements and general expenses
Payments for estate agency services where these payments are not required to be deposited in a trust account; for example, commission or management fees.
|
Exemptions
You do not need to deposit trust money in your trust account if:
- you act as an estate agent solely in relation to letting residential property for periods of 90 days or less (for example, holiday accommodation). See the Estate Agents (Exemption) Regulations 2014
- you are licensed in another state or territory, the transaction relates to a property or business in that state or territory, and you have complied with that state or territory’s law on estate agent trust accounts.
If you are unsure what to do with an amount of money you receive, we recommend you treat it as trust money, or seek independent legal advice.
Payments from general business accounts to trust accounts
Generally, you should not make any payments from general business accounts to trust accounts.
However, you must do so in order to resolve a deficiency in the trust account. For more information, see Accounting for trust money.
Residential tenancy bonds
For information on your residential tenancy bond obligations, see Property management.