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A real estate agency and its director have been fined for failing to meet their trust account obligations.
New Estate Pty Ltd and its sole director, Yi Ren Xia, have been fined $2,500 after failing to audit their trust accounts within the imposed time frame.
On 18 March, the NSW Civil and Administrative Tribunal (NCAT) reviewed a disciplinary decision against New Estate Pty Ltd and its director for failing to lodge its 2023 trust account audit within the required timeframe.
Despite prior warnings and an extended deadline from NSW Fair Trading, the audit was submitted around five months late.
Fair Trading initially imposed a reprimand and an $11,000 penalty, which was later reduced on internal review to $5,500 after considering mitigating factors, including Xia’s health issues and the company’s clean compliance history.
While the company did not dispute the breach, it argued that the penalty remained excessive given Xia’s medical condition and financial pressure, prompting the matter to be referred to NCAT.
According to the court paper, Fair Trading said that the $5,500 penalty was proportionate and that financial hardship was not a relevant consideration, while medical evidence from Xia’s psychiatrist confirmed a long-term condition causing periods of forgetfulness and confusion that likely contributed to the delay.
NSW Fair Trading spokesperson told REB that NCAT accepted that the breach was undisputed and medically explained, but upheld a reprimand and reduced the penalty to $2,500.
Fair Trading said property agents often handle large sums of money for house deposits and rent, making annual trust account audits critical to ensure those funds are accurately and honestly accounted for.
“Trust accounts exist to hold other people’s money, so the highest standards of integrity apply. Regular, independent audits are critical – they provide transparency, oversight and confidence that these funds are being properly managed,” NSW Fair Trading commissioner Natasha Mann told REB.
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