As Trust Account Managers and Licensed Real Estate professionals, we walk a fine line between keeping landlords happy and remaining compliant with strict legislative and tax requirements.

While some landlords may see their rental property as an extension of their personal finances, agents must always remember: you are not their personal bookkeeper, and your professional obligations must come first.

We’re seeing a growing number of questionable expense requests being directed at agents, ranging from mildly concerning to outright non-compliant.

These include:

  • Repairs undertaken by landlords themselves, with no valid tax invoice or ABN.
  • Paying the landlord’s children a “salary” from the Trust Account and labelling it as a property expense.
  • Entering personal property costs (like improvements on their own home) against a rental property’s income.

These situations put agents in a dangerous position.

The core issue is not whether the landlord ‘wants’ it entered or whether they’re considered a VIP.

It’s whether the expense is legitimate, documented, and claimable under both ATO guidelines and the Property and Stock Agents Act 2002 (NSW).

Trust Accounting is not a suggestion – it’s a legal obligation

The moment you enter an undocumented or illegitimate expense into your Trust Accounting software, you’re creating a paper trail that suggests you’ve verified its validity.

That’s a problem.

Under NSW legislation, licensed agents are required to keep accurate records of all Trust Account transactions.

That includes holding valid tax invoices for all expenses paid from trust funds. Without one, the entry could be deemed a breach of your obligations, putting both your license and your agency at risk.

Likewise, under the Australian Taxation Office, landlords can only claim expenses that are legitimate, incurred in the course of earning rental income, and properly documented.

If you process these expenses through the Trust, you’re effectively participating in tax misreporting.

You are not obliged to follow non-compliant instructions

Just because a landlord requests something doesn’t make it appropriate—or legal.

As a licensed professional, you are expected to say no when instructions conflict with your compliance duties.

Even if the landlord insists or threatens to take their business elsewhere, protecting your license must come first.

You can certainly allow landlords to enter expenses into their own records or management systems at their own risk, but your agency name should not appear on any transaction that you do not have the documentation to support.

Protect yourself and your business

Agents should always:

  • Request a valid tax invoice before processing any expense.
  • Refuse to enter any expense that does not relate directly to the rental property.
  • Keep detailed records of all decisions, especially when declining questionable requests.
  • Educate landlords on their own obligations and potential consequences of incorrect claims.

At the end of the day, your role is to manage Trust funds on behalf of others, not to enable poor record-keeping or facilitate dodgy tax claims.

Compliance may not always be popular, but it is always necessary.

At End of Month Angels, we support agencies across Australia with trust account reviews, reconciliations, and setup of compliant and efficient systems. Get in touch today to ensure your agency is compliant, protected, and audit-ready.