Management Rights FAQs
Frequently asked questions on all aspects of buying and selling Management Rights, and your obligations come audit time
In Queensland, there are laws to protect how money is received by Property Agents and Management Rights Licensees. Agents must maintain their trust account in accordance with the following Acts and Regulations:
- Property Occupations Act 2014
- Agents Financial Administration Act 2014
- Agents Financial Administration Regulation 2014
What is Trust money?
Rental payment received on behalf of another person or deposits received on behalf of another person for the sale of a property.
Who can operate a Trust Account?
A Resident Letting Agent or a Principal Agent of a business who holds a full Real Estate Licence. This licence is issued by the Office of Fair Trading.
What words must be included in the name of the Trust Account?
The words “Trust Account” must be included in the account name
Who must notify the Office of Fair Trading of the opening or closure of a Trust Account?
Within two months (60 days) of opening or closure of a trust account, the agent must complete an Agents Financial Administration Form (Form 5) and lodge it with the Office of Fair Trading. Your auditory may also be able to do this on your behalf.
Do you have to appoint an Auditor after the opening of a Trust Account?
The agent must give written notice of the appointment of an auditor within one month (30 days) of the opening of the Trust Account. The notice must include the auditor’s name and address and provide evidence that the auditor has accepted the appointment.
If an agent’s Auditor resigns, or the agent ends the appointment of the Auditor, what must be done?
Both the agent and the auditor must give written notice to the Office of Fair Trading immediately. The agent must engage a new auditor if the trust account is still operational.
When should the End of Month Cashbook Reconciliation be completed?
At the end of each calendar month, the agent must reconcile their trust account cash book with their trust ledger and a bank statement from their financial institution. They must complete this within five days after the end of the month, using the bank balance of the financial institution as at the end of the previous month.
Who is responsible for lodgement of the Audit Report with the Office of Fair Trading?
The agent is responsible for the lodgement of their Audit Report, however, auditors can lodge Audit Reports on an agent’s behalf. This process can be completed online.
Who is responsible to ensure the Trust Account has had the two unannounced examinations by the auditor in the audit period?
It is the agent’s responsibility to ensure the trust account is audited inline with legislation.
Does my auditor have to visit onsite to complete by trust account examination?
No. Legislation states the two unannounced examinations can be undertaken remotely, away from your office. The auditor is only required to be onsite for the final audit examination of your audit period.
How long must trust records be retained?
Agents must keep hard copies of the trust account ledger, completed cashbook reconciliations and audit reports for five (5) years.
When should Rental Bonds by lodged with the Residential Tenancy Authority (RTA)?
Bonds must be receipted and lodged with the Residential Tenancy Authority within ten (10) days from date receipt. RTA Bonds can now be lodged online.
What experience should I look for when appointing my auditor?
An experienced auditor with a background in real estate and management rights is paramount when looking for an auditor for your management rights business. At Count Gold Coast our auditor, Deslea Firth, has 20+ years experience within the industry, having managed her own management rights businesses and holds a current Queensland Real Estate Agents licence. An experienced auditor will identify and help you rectify any regulatory breaches before they become serious issues. It is an investment to protect the value you have built up in your licence and your business.
Does New South Wales have different rules and Legislation for trust accounts?
Yes. Agents in New South Wales must maintain their trust account in accordance with the Property, Stock and Business Agents Act 2002. We look after many New South Wales agents and licensees, so please contact us for further specific information around NSW requirements.
Can my auditor help me with other things I need, like getting my tax, BAS and bookkeeping done?
In some cases, yes. At Count Gold Coast we are able to offer you comprehensive services which includes trust account auditing, accounting and taxation, verifications, bookkeeping, data and telephony solutions, and wealth management.
New South Wales Licensees
What procedures must be followed to open and close a New South Wales trust account?
A licensee who opens a trust account must provide the authorised deposit-taking institution (bank) with a unique identifying number obtained from NSW Fair Trading (through NSW OneGov). A licensee must, within 14 days after closing a trust account, notify Fair Trading online through NSW OneGov.
When must a NSW audit be submitted?
The audit must be lodged within three (3) months after the end of the audit period. The NSW audit period ends 30 June. Audits must be lodged with Fair Trading no later than 30 September of that year.
Who is required to submit a NSW audit report?
All trust account audits must be completed and submitted online by the auditor through the Auditor’s Report Online portal.