An agency has held $412 for a former tenant for more than 2 years and cannot find her despite reasonable efforts. How should it treat this money?
Correct Answer
D) As unclaimed money, dealt with through Revenue NSW, not NSW Fair Trading
NSW Government guidance says trust money is unclaimed if a licensee has held it in a trust account for more than 2 years, and licensees must make reasonable efforts to locate the owner. Returns and payments of unclaimed money are made to the Chief Commissioner of Revenue NSW, not to NSW Fair Trading.
Why This Is the Correct Answer
After 2 years the money is unclaimed money and is handled through Revenue NSW.
Why the Other Options Are Wrong
Background Knowledge for Finance Taxation
Exam Tip for Finance Taxation
Common Mistakes to Avoid on Finance Taxation Questions
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- → Which of these amounts received by a NSW sales agency is trust money under the Property and Stock Agents Act 2002?
- → 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?
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