Is it time for you to ditch the trust account and switch to a ‘trustless’ model?

Quick refresher: What you’re moving away from

Under traditional arrangements, licensed agents who hold or receive trust money for sales or property management must:

• Open and maintain a compliant trust account.
• Bank rent and other trust money promptly.
• Keep detailed ledgers and cash books.
• Perform regular bank reconciliations.
• Undergo annual trust audits by an approved auditor, with strict deadlines and penalties for non-compliance.

The admin burden is significant and increasing as regulators refine requirements and increase scrutiny of how client funds are handled and audited.

A deeper concern is that trust accounts create pooled-fund risk: one bad apple can spoil the bunch. A dishonest staff member or a weak process can expose the whole rent roll. Trust account abuse and misappropriation occur too frequently, as a bad agent that has access to rental funds can steal hundreds of thousands of dollars. This has a detrimental impact on the agency and multiple clients.

Moving to a trust-free automated rental payments platform like Managed eliminates the need for an agency to manage a trust account. Agencies that use Managed are not permitted to directly handle the rental funds that are processed between the tenant and landlord.

Switching to a trust-free platform is a big decision for agencies and PMs alike, and requires careful consideration. We’ve explored some of these considerations below.

If you are not ready to leave your trust account just yet, there are probably better options among the established trust accounting systems.

Key things to consider before switching

Switching off a trust account (for rent flows) is strategic, not just technical. Here’s what to think through.

A. Regulatory and licensing implications

1. Do you still need a trust account for some activities?

Even if you stop using a trust account for residential rent, you may still need one for some arrangements. State rules around trust money are clear: if you hold or receive client funds, you must comply with trust account provisions.

2. Third-party app rules and tenant rights

Regulators are now paying close attention to “rent-tech” apps:

• NSW has issued guidance that landlords and agents may offer third-party apps, but cannot require tenants to use them to meet obligations like paying rent.
• Western Australia has specifically warned about risks when using third-party payment platforms instead of agents’ nominated trust accounts, particularly around fees, security, and dispute resolution.
• Consumer and tenant advocates have criticised some apps (not Managed) for forcing use and charging extra fees to renters.

You’ll need to ensure:

• Tenants have a fee-free option and are not coerced into paid options.
• Communication is transparent about how the platform works and any charges.

PMs who use Managed can rest easy, as the platform has addressed these concerns. Managed does not cost anything for tenants, as they have easy and free payment methods to pay rent. The default payment methods include fast bank transfer (via Osko) and BPAY. Tenants can add these to their net banking and set up recurring payments for automation.

All Managed transactions take place in Australia through our payments partner, Zai.

Managed also takes protecting data and customer privacy very seriously by following information technology (IT) security best practices. This includes:

• Protecting user sessions by using a variety of methods, such as strong passwords, two-factor authentication, and time limits
• Encryptions and hashing/tokenisation
• Continuous monitoring of systems and networks for access and threats, and regular penetration testing exercises

3. AML/CTF Tranche 2 reforms

From 1 July 2026, real estate agents will become AML/CTF Tranche 2 reporting entities with obligations around:

• Customer due diligence and Know Your Customer (KYC)
• Monitoring and reporting suspicious matters and large cash transactions
• Maintaining robust records and internal controls

A wallet-based system with detailed, exportable transaction histories and clear links between tenant, property and owner can make AML compliance and audit trails easier – but you still need:

• A formal AML/CTF program
• Procedures for reviewing unusual payment patterns
• Integration (or at least compatibility) with whatever AML platform you use

Managed does AML and KYC checks on all users. The platform uses a payment gateway and banking security and practices to ensure that customers are protected.

Managed has over 170,000 users and handles around $110 million across 70,000+ transactions every month, without any manual reconciliation.

Speak to your auditor, external accountant, and (if needed) an AML adviser to document how a trust-free platform like Managed supports both state trust law and federal AML obligations for your specific business.

B. Operational and staffing considerations

What work disappears – and what replaces it?

With trustless automation, you should see a big drop in:

• Daily bank downloads
• Manual rent receipting and allocation
• Trust bank reconciliations
• Preparing and running owner and creditor disbursement batches
• Year-end trust audit prep

Instead, staff focus shifts to:

• Exception handling (failed payments, disputes)
• Approving bills and maintenance
• Owner and tenant communication and delighting customers with tailored service
• Growth activities (business development, new properties under management)

Change management and training

Moving long-standing trust staff to a trust-free model is a major mindset shift. You’ll need:

• Clear process maps (“this is how rent flows now”)
• Training across PMs, accounts, and leadership
• Updated internal controls (who can approve what in the new system).

Scalability and role design

Removing manual reconciliation and end-of-month (EOM) crunch should mean you can grow the rent roll without proportionally increasing staff. You no longer need to recruit and retain a specific trust accountant, nor would you need to search for PMs who have trust accounting experience.

That has implications for:

• Team structure
• Key performance indicators (KPIs) – more on service and growth, less on processing
• Staff recruitment and retention – reducing month-end late nights and providing greater flexibility for staff leave are big pluses.

Financial and risk considerations

1. Direct costs versus hidden costs

Compare platform subscription and payment fees against

• Staff time spent on trust accounting
• Audit fees
• Bank fees and overheads
• Risk of penalties and remediation if something is mishandled

2. Fraud and misappropriation risk

Trust accounts are a known target for fraud and misappropriation; regulators and industry guidance keep highlighting that a single bad apple can spoil the bunch.

Trust-free wallets reduce that risk because:

• Funds are not pooled in an agent-controlled bank account.
• The agency only ever receives its fee portion, not full rent balances.
• Every transaction is logged and rules-driven.

3. Vendor risk and business continuity

You’re trading internal control of a bank account for reliance on a technology vendor’s:

• Uptime and resilience
• Support and onboarding capability

Due diligence is essential: ask about service level agreements (SLAs), redundancy, incident response, and how they would handle a serious outage.

D. Client (owner and tenant) expectations

1. Owners and landlords

Benefits you can position:

• Faster access to rent (often near real-time) instead of waiting for the month-end.
• Better visibility of property performance and maintenance.
• But you’ll need a communication plan:
• Why payments will look different on their statements.
• How their money is protected.
• How AML and compliance obligations are still met.

2. Tenants

To stay on the right side of regulators and public sentiment, you need to:

• Provide fee-free payment options (Managed supports fee-free bank transfers, Osko, and BPAY).
• Be transparent about what data is collected and how it’s used.

Pros of moving to trust-free property management

From a property management and business perspective, typical advantages include:

1. Huge reduction in admin load

• No daily trust bank downloads
• No trust ledger reconciliation
• No end-of-month trust disbursement runs
• Far less preparation for trust audits (for rent flows)

Agencies using trustless payment platforms report significant time savings and fewer late nights around the end of the month.

2. Adherence to regulation and lower audit burden (for rent flows)

You’re not holding those rent funds, so:

• You fall outside some trust account audit requirements for those flows (subject to state law and how your business is structured).
• You still need to be AML/CTF compliant, but a good system gives you clean, exportable transaction histories that help with AML reviews and audits.

3. Reduced fraud and misappropriation risk

Since the agency never has custody of the pooled rent:

• There is less opportunity for staff to divert funds.
• Any attempted misuse tends to show up as anomalies in rule-based flows rather than manual overrides.

4. Better owner cash flow and investor appeal

• Real-time or more frequent disbursements
• Easier for owners to push funds into offsets and manage their own cash flow
• A genuine point of difference when pitching against agencies still paying at month's end

5. Scalability and staff wellbeing

• Ability to grow the rent roll without proportional growth in trust admin headcount
• Less EOM crunch = better work/life balance and improved staff retention

6. Real-time visibility for principals and auditors

• Dashboards that show current rent status, arrears, bills and owner balances rather than last month’s reconciled numbers
• Easier to spot problems early and take action

The Managed platform receives data from each transaction in real time. Rent payments are instantly linked to the correct property, tenant, and owner ledger – no manual matching required. This means no “mystery deposits”, no misapplied payments, and no bank statement reviews. The ledger is always current, accurate, and auditable.

Cons, risks, and challenges

PMs thinking of switching to a trustless system would need to consider ways to overcome the following challenges:

Change management and learning curve

• Long-standing trust accountants and PMs might be wary of giving up familiar processes.
• You must rewrite procedures, update manuals, and train everyone.
• Initial months may feel slower as staff adapt.

Tenant perceptions and media scrutiny

• Media coverage of some rent-tech apps has highlighted forced use and extra fees for tenants, which can damage trust in your agency if not handled carefully.
• You’ll need to emphasise to tenants that Managed is a fee-free platform with easy options to pay rent.

How to choose between property management software options

When evaluating Managed and other PM platforms (including trust-based and hybrid systems), work through these factors.

1. Payment architecture

Ask yourself the following questions:

Does this platform:

• Run with a full trust account?
• Offer a trustless model like Managed?
• Provide a hybrid or choice model (some via trust, some direct)?

Which architecture best matches:

• Your regulatory risk appetite
• Your portfolio mix (residential versus commercial or social)
• Your strategic position and unique selling proposition (USP) – are you leaning into “trust-free property management” as a USP?

2. Compliance and AML readiness

How does the platform support:

• Record-keeping and exports for auditors and the Australian Transaction Reports and Analysis Centre (AUSTRAC)?
• Identification of unusual payment patterns and exceptions?
• The ability to integrate with or provide data to your AML/CTF solution?

3. Feature set beyond payments

Make sure core PM work isn’t an afterthought:

• Inspections and condition reports
• Maintenance and tradie workflows
• Arrears management and communications
• Customer relationship management (CRM) and prospecting tools
• Integrations with your CRM, accounting, and marketing stack

Managed, for example, emphasises that it’s a full-suite CRM with automated payments, not just a payment bolt-on.

4. Reporting & analytics

Look for:

• Real-time dashboards at the portfolio, team, and property level
• Tenant and owner ledgers that align perfectly with payment flows
• Flexible exports for accountants and auditors.

5. Experience and cost for owners and tenants

• Are there fee-free payment methods for tenants?
• Do owners clearly see the benefit (such as faster payments and more visibility)?

6. Implementation, migration, and support

• Data migration (properties, tenants, ledgers) from your current system
• Parallel-run options during the transition
• Onboarding and training programs – especially for accounts staff
• Local support and responsiveness if something goes wrong

7. Vendor maturity and track record

• How long has the platform been operating?
• How many agencies are using it?
• Has it attracted external investment and grown sustainably? (Managed, for example, has raised capital and is used by hundreds of agencies and has over 170,000 users.)

A simple decision framework for switching

You can boil the decision down to three big questions:

1. Strategic:

“Do we want to be a trust account agency, a hybrid, or a trust-free agency for rent flows?”

2. Risk and compliance:

“Given Tranche 2 AML, state trust rules, and rent-tech scrutiny, which model gives us the best balance of control, transparency and regulatory comfort?”

3. Operational and commercial:

“Which platform frees up the most time, reduces the most errors, and gives us the strongest owner and tenant experience – at a sustainable cost?”

If your honest answers lean towards removing trust account overhead, tightening controls and offering faster, more transparent payments, then a trust-free automated rental payments platform like Managed is worth serious consideration.

Just make sure you:

• Involve your auditor, accountant, and compliance advisers early.
• Map your current and future workflows in detail.
• Plan change management for your team and clear communication for your owners and tenants.

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