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A Sunshine Coast real estate director has been fined and temporarily disqualified from working in the real estate industry for mishandling trust account funds.
Fanghua Lin, along with his company, Sweetizens, was ordered to pay a $13,000 penalty by the Maroochydore Magistrates Court on 18 August 2022 for using trust money to pay business expenses and to buy another business.
The offences date to July 2021, when Mr Lin made two unauthorised transfers of trust money totalling $70,000 into a personal business account that he shared with another director of the business.
Mr Lin then made a further transfer of funds from the business account into a personal bank account, using the money to purchase a business. He later returned the funds into the trust account.
Approximately $15,000 was then transferred out of the trust account again to pay for company business expenses before being once again paid back into the account.
An investigation by Queensland’s Office of Fair Trading later uncovered the unlawful transfers.
Mr Lin pleaded guilty and was fined $10,000 and disqualified from working in the industry for two years. The company was charged separately and fined $3,000.
On handing down his decision, Magistrate Matthew McLaughlin said that real estate agents must be sure not to treat trust accounts as a slush fund. Transferring money out of a trust account for unrelated expenses represents a breach of the law, regardless of whether it is repaid.
Mr McLaughlin described Mr Lin’s behaviour as “an enormous breach of trust”.
Commissioner for fair trading Victoria Thomson echoed his sentiments, noting that a trust account was not a “back-up” for agents when they’re short on cash.
“Trust money does not belong to agents. It can’t be borrowed, used to prop up your business or for any other purpose outside of its authorised use,” Ms Thomson said.
“The Office of Fair Trading will investigate and seek penalties for those who deal with trust money inappropriately.”
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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