Trust-free property management is the way of the future

For decades, trust accounts have been the backbone of property management. They’ve also been one of the industry’s biggest pain points – onerous to reconcile, expensive to audit, and increasingly risky to run.

The real estate industry has been plagued by ongoing trust account theft, misappropriation, and auditing failures by rogue agents. These bad apples tarnish the reputation of the majority of real estate professionals who act honestly and ethically and go above and beyond for their clients.

Moreover, as Australia moves toward Tranche 2 anti-money laundering (AML) and counter-terrorism financing (CTF) reforms, property managers face a new compliance reality. Agencies will be expected to implement customer due diligence, transaction monitoring, and reporting controls that rival those of financial institutions.

As such, holding client money in a trust account will soon look as outdated as collecting rent money in a tin.

The good news is that new technology already provides a smarter path forward. Trust-free payment platforms like Managed offer agencies a way to automate payments, improve transparency, and dramatically reduce regulatory risk while eliminating the need to hold client funds.

Forward-thinking principals can not only transform their business by adopting automated secure payment platforms for rental transactions, but they can also ensure that trust account abuse does not occur in their agency.

So, what’s wrong with your tried and tested trust account?

Trust accounts were created to safeguard clients’ money by separating it from an agency’s operational funds. In principle, it’s a sound idea: rent, bonds, and supplier payments are quarantined under strict rules that protect landlords and tenants alike.

However, the bottom line is that while trust accounts solved yesterday’s problems, they lock today’s agencies into unnecessary custody risk, restrict cash flow, and entangle them in endless but inescapable administrative tasks.

In practice, trust accounting is an ongoing administrative grind. Property managers must reconcile transactions daily, verify withdrawals, maintain strict record-keeping, and prepare for regular audits. Even with the best intentions, human error is inevitable, and the stakes are high.

Common challenges include:

• Cost burden: Trust accounts cost more due to audit and bank fees. On top of this, some agents tell us that while an experienced property manager used to cost around $85,000, in some instances, this has almost doubled to $145,000. Another agent that earned $1 million in revenue from their rent roll would have had to spend almost $90,000 to recruit a trust accountant with property management experience.
  
  
• Complex reconciliations: Multiple payment methods, reference errors, and dishonours lead to time-consuming balancing exercises.
  
  
• Compliance risk: Different states and territories impose unique rules around trust account handling and auditing. Keeping pace with changing regulations adds to the workload.
• Fraud exposure: Manual payment files and account detail changes open the door to internal or external misuse.
  
  
• Cash flow delays: Funds often sit in limbo for days, affecting both landlords’ satisfaction and an agency’s reputation.
  
  
• Tenant UX friction: Tenants increasingly expect mobile-first options, saved payment methods, automated reminders, and flexible schedules.
  
  
• Technological bottlenecks: Many trust account systems still rely on legacy architecture that can’t integrate easily with modern payment rails or digital workflows.
  
  
• Requiring additional resources: Recruiting and retaining experienced property managers who are also well-versed in trust accounting has become increasingly challenging. Sometimes, agencies have to recruit a trust accountant with specialist knowledge of debits, credits, and ledgers, which adds to your business costs.

For years, agencies have simply accepted this rusted-on trust accounting system as “the way things are”. But new technology – and new regulation – mean the game has changed.

From ‘trust account’ to ‘trust-free’: A new frontier for property management

A trust-free platform like Managed is one in which the agency does not take custody of client funds. Seven years ago, Managed, a new breed of automated and secure property management platform, analysed the evolution of secure payments over the last 20 years and successfully adapted a solution for the property management industry. The goal was to build a secure platform that eradicates human error by transferring rental income in real-time while adhering to strict legislative and regulatory requirements.

The secure, regulated, and automated platform orchestrates payments between tenants, landlords, and tradies automatically. This modern system could automate as much as 40 per cent of a property manager’s workload.

This approach means rent is collected, verified, and distributed directly to the correct recipients without ever entering an agency-controlled trust account. The funds flow transparently through a system that is programmable, auditable, and compliant by design.

Managed has pioneered this model in Australia. By eliminating the need for agencies to hold client money, the platform removes the biggest pain point of property management – the trust account itself – while providing end-to-end visibility of every transaction and meeting legal requirements per the Property and Stocks Agents Act.

Managed is a 360-degree total cloud solution that handles all aspects of day-to-day property management, including complete property management workflows, inspections, forms, compliance, and maintenance. Agents can access it anywhere, anytime, from any device and with centralised data security.

The platform’s approach mirrors broader trends in financial technology, where industries from payroll to e-commerce have adopted real-time payments and API-driven platforms. By integrating directly with banks and payment gateways, property platforms are now functioning as financial infrastructure – not just management software.

Partnerships with fintech players like Zepto and Airwallex are enabling platforms like Managed to scale quickly and prepare for additional products such as credit, escrow, and international payments.

Automating workflows yields operational benefits

Ditching the trust account and opting for an automated rental payment platform can result in significant operational benefits for an agency. These include:

• Time saved on reconciliation: automation replaces manual matching, freeing staff to focus on customer service rather than spreadsheets.
• Faster disbursements: landlords receive funds almost instantly; suppliers are paid promptly; cash flow improves.
• Lower arrears: with digital payment options and automated reminders, tenants stay on schedule.
• Fewer errors and chargebacks: secure payment rails and automated workflows minimise data entry and bank transfer mistakes.
• Improved visibility: real-time dashboards provide transparency for property managers, owners, and auditors alike.
• Profitability: using an automated and secure payments platform can result in the same, or greater, rent roll performance with fewer hours and lower staffing costs. These systems can give agencies a stable foundation for growth and slash administrative costs by up to 90 per cent by transferring rental income in real time.

This combination of efficiency gains and compliance readiness sets a new standard for professional property management in Australia.

Automated rent collection means happier tenants and owners

For tenants, automation means simplicity. They can choose from multiple payment methods, set up recurring payment agreements, and receive automatic reminders, all from one digital interface.

For landlords, it means faster and more transparent payments. They can see in real time when rent is received, how funds are allocated and when disbursements occur without waiting for a trust account batch run or manual report. They can also track all requested repairs, maintenance, and capital investments on their property from start to finish.

Unlike old school property management software, which did little to protect contact information, history, and payment information, Managed is the most secure property management platform in the market.

The result is stronger relationships, enhanced consumer trust, fewer disputes, and greater confidence in the agency’s professionalism.

Implementation roadmap for progressive agencies

Transitioning from a traditional trust account model to an automated payments platform doesn’t have to be disruptive. The following roadmap can guide your approach:

1. Audit your current processes: map every inflow and outflow of funds: rent payments, bond lodgements, supplier disbursements.
2. Identify compliance gaps: assess how your existing systems handle identity verification, transaction monitoring, and record-keeping.
3. Engage stakeholders: include your auditor, accountant, and legal adviser in early discussions. Explain how alternatives to trust accounts work and confirm their compliance implications.
4. Pilot the platform: start with a subset of properties. Track reconciliation time, payment speed, error rate, and staff feedback.
5. Train your team: provide guidance on digital onboarding, payment approvals, and exception handling.
6. Communicate with owners and tenants: outline the benefits: faster payments, improved security, transparent records.
7. Review and scale: once metrics confirm improvement, expand across the rent roll and update internal policies accordingly.

Practical migration plan for a property manager

Here’s a six-step plan you can adopt to transition to Managed:

Step 1: Map your payment flows today

• Document how rents are collected (BSB/account, cash, direct debit, etc), how they sit in the trust account, and how you disburse to landlords and tradies.
• Identify key pain points: delayed settlements, manual reconciliations, payment exceptions, manual owner statements, higher risk of human error, and misappropriation of funds.

Step 2: Assess AML/CTF exposure

• Conduct a high-level risk assessment (as required under the Tranche 2 regime) of your payment flows: What are your counter-parties’ (tenants, landlords, suppliers) risk profiles? You will have to complete compliance tasks like identity verification, ownership structure analysis, automated risk assessments, ongoing monitoring, and secure record keeping.
• Map which parts of your operations may be relevant under the AML/CTF reforms. Ensure that your staff has access to training and advisory support specific to the real estate sector.

Step 3: Choose an automated payment platform like Managed

• Ensure the platform supports multiple rails (including fast bank transfers (OSKO), direct payment to BSB and account number, credit, direct debit, and BPAY) and integrates with your property management software (Managed or partner).
• Review the provider’s audit, security, reconciliation, API, and reporting capabilities.
• Confirm how funds flow (who holds custody, how risk is managed, how payees are approved, how exceptions are handled).

Step 4: Pilot the new flow

• Select a subset – say 50-100 tenancies across varying types (standard lease, multiple tenants, higher-risk tenants).
• Enable stored payment methods, direct debit mandates, auto-reminders, and a self-serve tenant portal.
• Track KPIs: time to settlement, number of payment exceptions, manual reconciliation hours, and landlord/supplier payout times.

Step 5: Compliance sign-off

• With your auditor or legal adviser, confirm how your trust account obligations would change (if the agency no longer holds funds) and how Managed aligns with the new AML/CTF guidelines.
• Update your policies and procedures manual: include payment flows, AML/CTF checks (customer due diligence, monitoring, record-keeping), and platform governance.

Step 6: Rollout and retire legacy flows

• Expand the platform rollout across your entire rent roll.
• Communicate to tenants and landlords: explain new payment options, benefits, and timelines.
• Gradually wind down manual trust account payment paths.
• Monitor routinely: reconciliations, arrears, payment failures, alerts generated by the platform, and compliance reporting readiness.

Managed: empowerment through trust-free property management

Managed has been purpose-built for the future of property management in Australia. The platform automates rent collection, owner disbursements, and tradie payments without a trust account – reducing risk, saving time, and simplifying compliance.

While the technology underpins the process, the focus remains squarely on empowering property managers. Our platform provides:

• End-to-end automation across receipts, reconciliation, and disbursement.
• Multiple payment rails, including fast bank transfers (OSKO), direct payment to BSB and account number, credit, direct debit, and BPAY.
• Full transparency, with every transaction traceable to its source.
• Regulatory alignment, supporting AML Tranche 2 reforms and doing AML checks on users.
• Scalability, so agencies can grow portfolios without increasing back-office load.

Going trust-free and choosing Managed is the next logical step in the evolution of professional property management.

Common objections

“Trust accounts are required by law anyway – why move?”

They are required when your agency receives or holds client monies. But by redesigning your flows so that payments are automated via a platform like Managed (rather than the agency holding funds), you reduce custodial risk, simplify admin, and better align with AML/CTF expectations. Moving now positions you ahead of the regulatory change curve.

“We’ll pay more in fees for the payment platform.”

Yes, there is a cost. But compare against staff time saved (reconciliations, exceptions), better staff recruitment and retention levels, reduced arrears/dishonours, faster owner payouts (leading to better retention), and reduced regulatory risk. The ROI is strong.

“What about tenants who want to pay by BPAY or cash?”
Managed can support multiple rails. For non-standard methods, you can retain manual pathways temporarily, but proactively shift most flows to digital rails over time to standardise your data and compliance flows.

“Are we definitely caught by Tranche 2 reforms?”
From 1 July 2026, financial crime compliance obligations will apply to companies that conduct services related to the sale, purchase, and transfer of real estate. But the broader implications (payments, funds held, risk of trust account abuse) mean you should treat the reforms as a strong incentive to upgrade your controls now. Better to be ready than to face surprises when rules tighten.

Become a revolutionary trust-free property manager

Over the past seven years, more and more of Australia’s most successful real estate businesses have made the switch to Managed, embracing a future built around automation, transparency, and instant payments.

The next few years will redefine how Australian property managers think about payments, compliance, and client trust, particularly given the combination of Tranche 2 AML reforms and advancements in payment automation.

Property management technology is no longer a background choice – it is a strategic decision that directly impacts efficiency, recruitment, client experience, and profitability.

With one in three Australians living in rental housing, the performance of the property management sector has never been more important. Agencies that equip themselves with next-generation platforms will not only run more effectively, but also stand out in a crowded market.

By adopting an automated property payments model today, property managers can move from compliance anxiety to competitive advantage.

The choice is simple: keep managing the risks of yesterday, or become the dynamic property manager of tomorrow.

To find out if Managed can help drive your rent roll growth book a discovery meeting