Ditch the trust account – or risk theft and fraud within it

The real estate industry may have used trust accounts for decades, but the recent spate of extreme trust account abuse cases highlights the need for property managers to adopt watertight technology solutions that protect their agency and clients.

This has become increasingly critical amid the heightened fear of fraud, cyber theft, and scams. Rental payments worth billions of dollars are transacted every month, and landlords will be seeking assurance from their property managers that their rental income will be delivered to their bank account in a secure manner.

Landlords count on professional property managers to manage their investment property with due diligence and ensure that it is occupied by the best tenants, they receive rent that is at market rate, and the property is well-maintained. This is the reason why 70 per cent of all rental properties are managed by agencies.

However, every time Consumer Affairs and Fair Trading agencies identify a handful of rogue agents who steal and misappropriate funds or mismanage their trust accounts, it can damage the reputation of the industry as a whole and shake the trust placed in property managers by landlords.

Moreover, the financial repercussions of trust account abuse can be significant for agencies, as they are typically slapped with penalties for trust account mismanagement and theft by their agents.

The increasing frequency and scale of trust account abuse should raise alarm bells for agencies and property managers. For example, Melbourne-based Reuben Family Pty Ltd sole director Mark Alexander pleaded guilty to not only neglecting to complete necessary trust account audits between 2021 and 2026 but also operating his company without a licence. It was reported that Reuben admitted that his company made deposits of $305,000 into a NAB everyday account rather than a trust fund.

In another case, a NSW Northern Rivers real estate entity operating agencies belonging to a former councillor was found to have breached its obligations to have its trust accounts audited by the required deadline, and it was fined $5,500 and put on NSW’s Name and Shame register.

In February 2026, Western Australian (WA) real estate agency Jim’s Realty Pty Ltd was hit with a record $225,000 fine following almost 60 “unexplained” trust account withdrawals.

Consumer Protection WA described the case as “one of WA’s worst real estate misconduct cases” and identified a “sustained pattern” of trust account breaches and failures to lodge tenant bonds.

An investigation was launched into the business in May 2023 following an audit of the agency’s 2021 annual report, which uncovered a $188,437 discrepancy between the trust account ledger and the bank balance. Authorities identified 57 unexplained withdrawals totalling $334,915.

Cases like these demonstrate why the most forward-thinking real estate professionals, agencies, and property managers have abandoned the trust account and adopted an automated rental payments platform like Managed to automate their admin tasks, increase efficiencies, and importantly, comply with the law.

The pioneering technology enables them to run every aspect of their rent roll without needing to run a trust account. This means agencies can never access rental funds, providing landlords with the assurance that their hard-earned money will not be lost to theft, fraud, and misappropriation.

What is the difference between trust accounts and trust-free property management?

The core difference between trust accounts and a trust-free model is custody of funds and the workflow. In a traditional trust account set-up, the agency receives and holds rent in a trust account. The agency must run receipting, disbursements, and end-of-month reconciliations of cash book versus bank statement versus ledgers. Regulators describe reconciliation as ensuring that the totals of the trust account cash books, bank statements, and ledger accounts all match.

Trust accounting tools can streamline, but the agency still carries the operational burden and compliance exposure of holding client money.

Additionally, traditional property management software systems store clients’ bank details, and those are accessible and can be easily changed by users.

Managed (automated payments and platform workflow)

On the other hand, Managed is a new type of secure platform that removes human error by transferring rental income in real time while complying with strict legislative and regulatory requirements.

The standout feature in Managed is that there is no trust account to manage, and rental funds are never held or accessible by the agency. This means no manual reconciliation or end-of-month trust account grind.

Managed is akin to internet banking for investment properties. Every user (agency, landlord, tenant, and tradie) has their own digital wallet, which is basically a digital bank account like PayPal.

Tenants pay their rent into this wallet using BPAY, fast bank transfer (Osko), credit card, or direct debit. The Managed system automatically splits the funds and pays the management fee to the agency wallet, tradespeople’s bills to the tradie wallet, and net rent to the owner wallet. These funds are then paid out to the bank account of the agency, tradie, and owner. Owners can choose to receive their rent monthly, weekly, or instantly.

Maintenance requests and work orders can be managed inside the platform (the tenant lodges maintenance in-app; the property manager can send work orders to tradies from the maintenance request).

Reporting includes an arrears snapshot dashboard for principals with filtering by portfolio or agency-wide performance.

How much time do property managers save?

Property managers who use traditional trust accounts find that their time is drained by tasks such as:

• daily/weekly banking checks

• misallocated payments (wrong reference, partial payments)

• dishonours and reversals

• end-of-month reconciliation and audit pack preparation

Because reconciliation is compliance-critical, it’s not something you can “skip” – you have to prove your records and bank accounts match.

Managed workflow: Why it’s faster

Managed’s model is explicitly positioned to remove the need for the agency to run a trust account and therefore avoid manual reconciliations and end-of-month stress tied to that.

Realistic time-saving ranges (use these as planning figures)

Exact hours vary by rent roll complexity, but these ranges are commonly achievable when you remove trust-account reconciliation tasks:

• Traditional trust account: around three to eight hours per 100 properties monthly on reconciliation and exceptions

• With Managed: around half an hour to two hours per 100 properties monthly on exceptions/oversight (because you’re monitoring, not reconciling a pooled trust account)

Property managers could expect to save around two and a half to six hours per 100 properties monthly. For a 1,000-property rent roll, that’s roughly 25-60 hours per month saved on admin tasks, so property managers can focus on providing clients with higher-value service.

Disclaimer: Any time and cost savings described above are indicative and based on general industry workloads. Actual results will vary by agency size, internal processes, staffing, existing software, as well as payment mix, arrears rates, and portfolio complexity. You should review your own internal data and seek independent accounting or financial advice before making any business decisions or marketing claims.

The difference in disbursements

In a traditional trust account, disbursements usually mean:

• scheduled owner payments (often batched)

• bill payments requiring approvals, data entry, and sometimes ABA file handling

• end-of-period statement timing pressures

• back-and-forth if money is “in transit” or misposted

Managed disbursements

Property managers who use Managed can position speed as one of their key value drivers because owners can be paid instantly when rent is received (net rent). That changes disbursements from “batch processing work” to “rules and monitoring”.

Time impact (planning ranges):

• Traditional: around two to five hours per 100 properties monthly for disbursement runs and exceptions

• With Managed: around half an hour to one and a half hours per 100 properties monthly (mainly oversight and exception handling)

Estimated saving: around one and a half to three and a half hours per 100 properties per month.

Time saved on maintenance coordination

Traditional maintenance workflows are often fragmented across:

• emails, calls, photos via SMS

• manual creation of work orders

• chasing quotes

• status updates to owners and tenants

• invoice and payment coordination

This becomes a high-volume admin drain because it’s communication-heavy.

Managed maintenance workflow (why it reduces admin)

Managed supports:

• tenants lodging repairs and maintenance in the platform (structured intake, fewer missing details)

• property managers sending work orders to tradies directly from the maintenance request

• owners tracking maintenance and having communication stored against relevant tasks (this means they are not chasing property managers for updates)

Time impact (planning ranges)

• Traditional software: around 10 to 20 minutes per maintenance job in admin handling

• With Managed: around six to 12 minutes per job. There is less rework, and communication is centralised.

If your agency handles 200 maintenance jobs a month, that could mean around 25 to 45 hours per month saved in aggregate admin effort.

Disclaimer: Any time and cost savings described above are indicative and based on general industry workloads. Actual results will vary by agency size, processes, staffing and existing software. You should review your own internal data and seek independent accounting or financial advice before making any business decisions or marketing claims.

Reporting advantages

With traditional property management software, reports are often generated from a trust ledger structure and may be “periodic” rather than truly real-time. Many agencies still export to spreadsheets for principal-level visibility (arrears, performance, and bottlenecks).

Managed reporting: What’s materially different

Managed explicitly highlights a principal-level snapshot dashboard for arrears review, with the ability to filter by portfolio or whole-of-agency performance. It also offers an owner view that consolidates property data and tracks items like maintenance and arrears, and keeps comms stored with the task.

This matters to an agency’s operations because reporting becomes less about end-of-month compilation and more about continuous visibility, which reduces escalations and helps principals intervene earlier (arrears, maintenance delays, workload imbalance).

How Managed helps agencies stay audit-ready

“Audit-ready” in property management typically means you can quickly produce:

• clean transaction history

• clear approvals and authorisations

• evidence of controls (who did what, when)

• consistent records without manual patching

With traditional trust accounts, audit readiness requires additional labour. You can be audit-ready, but it often relies on:

• reconciliations being perfect

• clean processes around payments and payee changes

• strong internal controls

• time spent compiling audit packs

Reconciliation expectations are explicit: cash books, bank statements, and ledgers must align.

Managed: Audit readiness is more “built-in”

Managed’s model is designed to reduce the trust account risk surface. There is no trust account to manage, and the agency never holds or accesses rental funds. This means fewer custody processes for auditors to test in the traditional trust-account sense.

• Automated transaction workflows (less manual handling means fewer manual errors to explain)

• Centralised maintenance/work order workflows create a searchable operational trail (requests, actions, communications).

• Principal dashboards and consolidated views make it easier to demonstrate oversight on arrears and performance.

Net effect: instead of deliberately preparing for audit, you’re often operating in a way that’s continuously auditable (clear system trail, fewer manual steps, fewer reconciliations).

Managed versus traditional trust account: Quick overview

The next-gen property managers are making the shift

The case for change is clear for agencies that want to boost their operational efficiencies, eradicate trust account fraud and theft, and propel their business to new heights.

Ditching the trust account and moving to an automated rental payments platform like Managed ensures that your agency is not vulnerable to trust account fraud by a few bad apples in the real estate industry. With new anti-money laundering rules being implemented from 1 July 2026, agents will be expected to join the efforts to end money laundering, meaning the responsibilities and reporting for property managers will only increase.

Managed already equips agencies with a digital platform that is embedded with anti-money laundering and counter-terrorism safeguards.

Property managers now have a clear alternative to how they manage landlords’ rental funds in a secure manner. It is time for them to understand and explore these options and make informed decisions so they can position themselves as a next-gen tech-savvy agency and stay ahead of a changing landscape.