A Fremantle real estate agency has been fined and ordered to pay costs by the WA State Administrative Tribunal, after it was found guilty of an unauthorised withdrawal from a trust account.
Port City Pty Ltd, trading as Port City Real Estate, has been fined $3,000 and ordered to pay costs of $1,000 after the trust account breach.
Port City Real Estate was found to have withdrawn $4,735 from the trust account in July 2017 as a “break contract fee”, in circumstances where its agreement with the client did not permit it.
According to a media statement by Consumer Protection Western Australia, the agency believed it had authority to withdraw the funds when the client failed to respond to correspondence advising them of the charge.
The statement also said the agency stated that it has made changes to its procedures to ensure the breach of the Real Estate and Business Agents Act is not repeated.
Commissioner for Consumer Protection David Hillyard said in the statement that real estate agents must not assume funds being held in trust on behalf of clients can be withdrawn without authority.
“Technically, the money is owned by the client until it can be dispersed according to the property management agreement, as specified by the act or as agreed by the parties,” Mr Hillyard said.
“Agencies must be acutely aware of the rules surrounding the handling of trust funds and ensure that they are followed, without exception.
“Even if money is withdrawn by a mistaken belief, the violation can result in disciplinary proceedings, as has happened in this case, which adversely affects the agency’s reputation in the community.”