The Minns Labor Government has continued its efforts to protect home buyers and sellers, with real estate agencies across NSW being hit with more than $200,000 in fines as part of a major compliance operation targeting the management of client funds.
NSW Fair Trading’s Strata and Property Taskforce has wrapped up a statewide operation which focused on agents entrusted with holding consumers’ money. The compliance operation uncovered dozens of businesses and licence holders falling short of their legal and professional obligations.
This included a Western Sydney real estate agency that lost its licence and was fined $22,000 after it repeatedly failed to provide mandatory trust account audits despite multiple reminders and deadline extensions. The business was also disqualified from the industry and barred from directing, managing or operating a licensed property business until the outstanding audit is completed.
Another Sydney agency was fined $5,500 for failing to submit a required trust account audit. After repeating the same breach, it was further fined $11,000, and its Licensee in Charge was directed to complete extra training.
The Property and Stock Agents Act audit undertaken by the Taskforce targeted higher-risk businesses and licence holders using intelligence-led compliance data, helping NSW Fair Trading focus its efforts where it would have the greatest impact.
While most agents comply with their trust account obligations, the audit identified a small number who did not and reinforced industry standards.
Trust account audits play an important role in safeguarding consumer money and ensuring agents are properly managing funds held on behalf of clients.
The statewide initiative resulted in 34 businesses being put on notice and facing potential licence suspension, 41 overdue audits being submitted, more than $200,000 in fines, 32 warnings, three industry bans and six mandatory training orders.
Regulatory outcomes may be published on the Government’s Name and Shame Register, helping consumers make informed decisions and promoting transparency across the property sector.
The Government has invested $8.4 million in the Strata and Property Taskforce to bring together specialist inspectors, investigators and dispute resolution experts to crack down on misconduct and lift professional standards to support consumers.
The Government currently has its fourth and final tranche of legislation before NSW Parliament to make apartment living fairer. These results are part of a broader legislative agenda that has:
- Increased penalties for strata managing agents who don’t disclose perceived or potential conflicts of interest,
- Required payment plans to be offered to owners in financial hardship,
- Implemented a world-first in strata regulation by allowing NSW Fair Trading to issue compliance notices and enter enforceable undertakings with owners corporations that do not meet their duties to maintain and repair common property,
- Protected for owners from bill shock by requiring developers to have initial levy estimates in new strata buildings to be independently certified,
- Banned strata managing agents from taking a commission on insurance products when they don’t play a role in finding the best deal for owners,
- Made it easier to do minor renovations,
- Removed barriers to the uptake of sustainability measures such as solar panels and electric vehicle charging by prohibiting bylaws that block the infrastructure due to external appearance.
This is all part of the Minns Labor Government’s plan to make the property market fairer and more transparent for the people of NSW.
Consumers who suspect misconduct should report it to NSW Fair Trading online at www.nsw.gov.au/fair-trading.
Minister for Better Regulation and Fair Trading Anoulack Chanthivong said:
“The Minns Labor Government will not tolerate misconduct or poor compliance practices that put consumers’ money at risk.
“When people hand over funds to a real estate agent, they have a right to expect that money will be properly managed and protected.
“Trust accounts exist to safeguard consumers. Agents who fail to meet their legal obligations can expect strong enforcement action.
“These compliance activities are part of the Minns Labor Government’s commitment to strengthening consumer protections and maintaining confidence in the NSW property market.
“While the vast majority of agents do the right thing, those who repeatedly fail to comply with trust account requirements will face the consequences.”
NSW Strata and Property Services Commissioner Angus Abadee said:
“Trust account audits ensure money being held on behalf of consumers is properly managed and accounted for.
“While most property professionals comply with their obligations, those who ignore trust account requirements risk significant consequences.
“These outcomes send a clear message that businesses which disregard trust account obligations risk significant penalties and licence sanctions.”
Minister for Better Regulation and Fair Trading
This post appears in Strata News #805.
This article has been republished with permission from the author and first appeared on the NSW Government website.
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