If you’re a real estate agent operating in New South Wales, staying compliant with trust account regulations is not optional — it’s the foundation of your licence.
One of the most common areas of non-compliance arises when agencies fail to keep sales and rental trust accounts separate, as required under the law.
What the Legislation Requires
According to Schedule 1, Clause 21 of the Property and Stock Agents Regulation 2022 (NSW), licensees in charge must maintain separate trust accounts for rent received and for sales proceeds.
These trust accounts must be treated as entirely distinct financial records — with separate bank accounts, ledgers, reconciliations, and audit trails.
The reason behind this separation is simple: it ensures transparency, reduces the risk of misappropriation, and allows for clear accountability of trust money. Mixing sales and rental transactions in a single trust account, or even in a single set of books, is a breach of the regulation.
The Role of Compliant Trust Accounting Software
To meet your legal obligations, it is crucial that your trust accounting software supports full compliance. This includes:
- Preventing the alteration, deletion or amendment of transaction records once they’ve been entered;
- Maintaining distinct records for each trust account;
- Supporting individual reconciliations for rental and sales accounts;
- Generating audit-ready reports and ensuring all trust movements are fully traceable.
It is the responsibility of the licensee in charge, not the software provider, to ensure that the trust accounting platform being used is fit for purpose and compliant with NSW law.
Using software that doesn’t allow proper separation of trust records or that permits retrospective changes to financial data can put your agency at serious risk — even if the breaches are unintentional.
Penalties for Non-Compliance
Failing to comply with trust account obligations can result in substantial penalties:
- Fines of up to $11,000 for individuals
- Fines of up to $22,000 for corporations
- Disciplinary action from NSW Fair Trading, including licence suspension or cancellation
In addition to these penalties, you may also face reputational damage and potential claims from clients or stakeholders if trust funds are mismanaged or misreported.
Taking Action Now
If you are currently operating both sales and rental departments, now is the time to review how your trust accounts are being managed. Ensure you have:
- Separate bank accounts for sales and rental trust money
- Separate ledgers and reporting structures
- A compliant software solution that protects the integrity of your financial records
If you’re unsure whether your current setup meets NSW compliance requirements, seek the support of a trust accounting professional.
At End of Month Angels, we assist real estate agencies in aligning their trust operations with legislative standards. From reconciling accounts to guiding software use, we help you ensure full compliance and peace of mind.