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Agency fined for trust account breaches

Agency fined for trust account breaches

by Nick Bendel 0 comments

The director of a sales and property management business has revealed the agency’s rental account is at the heart of a compliance failure.

Consumer Affairs Victoria said GL Lee Real Estate and its director, Quoc Hung Ly, had breached the Estate Agents Act by failing to keep on top of their accounting responsibilities.

Mr Ly told Residential Property Manager the Melbourne agency had been guilty of making honest mistakes, which he attributed to staffing and software problems.

“There were a few human errors: some girls came on board, they made a few mistakes, then they left and it just accumulated,” he said.

“It’s just the rental account – it has a lot of transactions every day. The sales and the tenancy is OK – there’s no problem with those.”

Mr Ly said the agency is searching for new software, which is expected to be easier to use than the old version and thus reduce the potential for error.

Consumer Affairs said the agency must stop using its in-house accounting software unless it, or some other trust accounting software, is certified as legally compliant by an auditor.

GL Lee Real Estate and Mr Ly must also pay $4,000 into the Victorian Property Fund, which is used by Consumer Affairs to fund grants and compensation claims.

Consumer Affairs said the two parties had failed to keep full and accurate accounting records.

The regulator said they also failed to have the agency’s trust accounts audited over 2008-2011 and failed to lodge copies of its trust account audit reports within the required time.

“The tribunal found that the company and Mr Ly engaged in conduct that was unprofessional or detrimental to the reputation or interests of the estate agency industry,” Consumer Affairs said.

“The tribunal also found that Mr Ly failed to comply with his statutory duties as officer in effective control of the company.” 

Consumer Affairs said GL Lee Real Estate and Mr Ly could have their licences suspended if they fail to provide an unqualified trust account audit report within 90 days.

Their licences could then be cancelled if they still fail to produce the audit report within a further specified period.

[Related: Compliance systems questioned after trust account failures]

Agency fined for trust account breaches
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