A small agency does both sales and property management and banks sales deposits and rent into one general trust account. What do the rules of conduct require?
Correct Answer
A) Separate trust accounts for rental money and for sales money
Schedule 1, rule 21 of the Property and Stock Agents Regulation 2022 requires the licensee in charge to ensure there are separate trust accounts for rental money and sales money and that money is paid into the right account. NSW Government guidance says rent and sales deposits must not be kept in the same general trust account.
Why This Is the Correct Answer
The rules of conduct require rental money and sales money to be held in separate trust accounts.
Why the Other Options Are Wrong
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- → An agency records every sales deposit it holds in a single ledger headed 'Sales deposits'. What does the Regulation require instead?
- → A property manager receipts $1,800 cash rent on Tuesday and locks it in the office safe for the agency's usual Friday banking run. Is this compliant, assuming Wednesday banking was practicable?
- → A supplier obtains a court judgment against a NSW agency for unpaid office fit-out costs and tries to enforce it against the agency's trust account. What is the position?
- → A licensee in charge is going on leave and wants her Class 2 senior property manager to approve trust payments while she is away. Can she delegate this?
- → At the end of August an agency balances its trust cash book and reconciles it to the bank statement. By when must it prepare the trial balance of all trust ledger accounts?
- → An agency is clearing out old files. How long must it keep its trust account records and its trust account auditor's reports?
- → A property manager is handed a tenant's rent in cash at the office. When must a trust receipt be prepared?
- → A vendor and purchaser agree that the 10% deposit on a long settlement should earn interest for them. How can the agent hold it so the interest is not paid to the Statutory Interest Account?
- → An agency closes one of its trust accounts after merging its sales operations. What must the licensee do about the closure?
- → A licensee discovers that one of the agency's trust accounts has become overdrawn after a mistaken payment. What does the Property and Stock Agents Act 2002 require?
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Previous Question
A property manager receipts $1,800 cash rent on Tuesday and locks it in the office safe for the agency's usual Friday banking run. Is this compliant, assuming Wednesday banking was practicable?
Next Question
A supplier obtains a court judgment against a NSW agency for unpaid office fit-out costs and tries to enforce it against the agency's trust account. What is the position?