New South Wales agency trust accounts: rules, records and the audit

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Kooky

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A deposit on a house, a fortnight's rent, a payment taken at the front desk for a landlord: none of that money belongs to the agency that receives it. In New South Wales it is trust money, and the way an agency holds it is one of the most closely prescribed parts of running the business. The rules decide which bank the money sits in, what the account is called, who may release a single dollar of it, how every movement is written down and who checks the books each year.

This guide sets out those rules as NSW Fair Trading, the state regulator, describes them on its trust account, rules of conduct and licensing pages, and as the Property and Stock Agents Regulation 2022 lays them down in its part on trust money. It follows the money in order: opening the account, receiving and banking, paying out, keeping the books, closing the account, handing over unclaimed money and lodging the annual audit. It describes the general rules; how they apply to one agency depends on its structure and the work it does.

NSW Fair Trading trust account page, last updated 2 June 2026, and the Property and Stock Agents Regulation 2022.

What trust money is and who must hold it

NSW Fair Trading puts the starting point in one sentence: licensees under the Property and Stock Agents Act 2002 must hold clients' funds in a trust account. The money can be used only for the client it belongs to, and it must be paid out as that client directs. An agency cannot borrow from it, cannot use it to cover its own bills for a few days and cannot move it between clients.

The duty attaches to the licensee, which in practice means the agency: the licensed corporation where there is one, or the individual licensee or firm where there is not. Inside the agency, the person the rules look to is the licensee in charge, the agent nominated to run that place of business. According to NSW Fair Trading's rules of conduct page, it is the licensee in charge who must set the accounts up.

Not every licence holder can take that role. The regulator's real estate agent licence page says a class 2 licence holder cannot open or manage a trust account and cannot be nominated as licensee in charge. Only a class 1 agent nominated as licensee in charge may authorise withdrawals. For an agency, that makes the class 1 licence and the nomination the two conditions behind every trust account it operates.

General accounts and separate accounts

NSW Fair Trading distinguishes two kinds of account. A general trust account pools the money of many clients, each tracked through its own ledger. A separate trust account is opened for particular parties: the regulator lists accounts opened for a vendor and purchaser, accounts for strata plans, and accounts opened by an owners corporation under the Strata Schemes Management Act 2015.

Within the general category there is a further split that matters to every agency doing both sales and property management. The rules of conduct page says the licensee in charge must set up one general trust account for rental money and another for sales money. Rent and sales deposits must not be held in the same general trust account. An agency with a rent roll and a sales team therefore runs at least two general accounts, each with its own registration, its own books and its own place in the audit.

The difference between general and separate accounts shows again when interest is dealt with, as a later section explains. It also shapes the paperwork: a general account needs a ledger for each client, while a separate account exists for the people named on it.

Opening an account: bank, name and number

A trust account cannot be opened at any bank the agency happens to use. NSW Fair Trading says trust accounts must be held at an authorised deposit-taking institution in New South Wales, and that the Secretary has approved 22 of them. The list on the regulator's page runs from ANZ, Commonwealth Bank, NAB and Westpac, through St. George, Macquarie Bank, Bendigo Bank, HSBC and Suncorp Bank, to regional and mutual institutions such as IMB Bank, Hume Bank, Regional Australia Bank and Newcastle Greater Mutual Group.

Three requirements then apply to the opening itself. First, the licensee must tell the institution in writing that the account is a trust account required by the Act. Second, the account name follows a fixed pattern. If a corporation holds the account it must be in the corporation's name; otherwise it is in the name of the licensee or the firm. That name comes first, any other identifier follows it, and the words "Trust Account" must appear in the account name and on every cheque drawn on it.

Third comes the unique identifying number, usually shortened to UID. Section 21 of the Property and Stock Agents Regulation 2022 says a licensee must give the institution a unique identifying number obtained from the department before applying to open a trust account. NSW Fair Trading issues the number through its online trust account registration. The licensee enters a licence number and an email address and receives a confirmation email with a notification form in duplicate. The form is printed and lodged with the financial institution, and the licensee keeps the stamped duplicate. For a corporate account the registration uses the corporation's licence number.

Every trust account needs its own UID and is registered separately, so an agency with a rental account and a sales account holds two numbers. The Regulation makes giving the number an offence provision, with a maximum penalty of 40 penalty units for a corporation and 20 penalty units in any other case.

One group cannot use the online route. NSW Fair Trading says interstate licensees working in the state under Automatic Mutual Recognition must first complete their notification to the regulator and then ask its Statutory Interest Unit by email for a UID.

Who may authorise a withdrawal

On this point the regulator leaves very little room. Only the licensee in charge of a business may authorise withdrawals from its trust account, and only one licensee in charge may authorise withdrawals on any given account. That person must review and approve every transaction before it happens, and NSW Fair Trading spells out that this includes electronic transfers as well as cheques.

The authority cannot be delegated. An agency may employ a trust accountant, a property management team and a bookkeeper who prepare the payments, but the approval of each one stays with the licensee in charge. The regulator adds a warning for the case where that line is crossed: a licensee in charge who lets someone else withdraw funds for them may still be liable for any breach or misuse.

For an agency with several offices, the practical consequence is that the routine of each office is built around one person's availability. Rent disbursements, deposit releases and refunds all wait for the same approval, which is why the nomination of the licensee in charge is a business decision as much as a licensing one.

Receipts and banking

The Regulation picks the money up at the moment it arrives. Section 22 says that immediately on receiving trust money the licensee must prepare a receipt, or have one prepared, and make a copy at the same time, either on the duplicate form in a trust receipt book or in the cash book record described below.

A receipt is a defined document. It must show the date of issue, a sequential number, the licensee's name with the words "Trust Account", the name of the person paying, the name of the person the money is held for with a ledger reference, details that identify the transaction, the amount, and how it was paid: cash, cheque, electronic funds transfer or otherwise. A rent receipt carries two more items, the date to which the rent is calculated and the position of the rental account at that date.

Receipts are prepared in numerical order, and the original must be issued to the payer on demand. The agency keeps the originals it did not issue, any cancelled originals and the duplicates. The Regulation allows the duplicates to be dropped where an electronic record was made as soon as practicable after the money was received.

Then comes the banking deadline. Section 24 says trust money must be paid into the trust account before the end of the next business day after it is received, if that is practicable, and otherwise as soon as practicable after that day. A worked example, assuming an ordinary working week: a holding deposit handed over at the office on Friday 11 September 2026 would be due in the trust account before the end of Monday 14 September 2026.

When the licensee makes the deposit in person, section 26 requires a deposit book or written deposit record to be produced to the institution. It shows the date, the amount and whether the deposit is made up of cheques, notes or coins, and for each cheque the drawer, the institution and branch it is drawn on and its amount. The agency keeps a duplicate. This rule does not apply to money that payers put straight into the trust account, electronically or otherwise.

One conduct rule sits alongside these. According to NSW Fair Trading's rules of conduct page, a vendor's agent who takes an expression of interest deposit must promptly tell the client that it has been paid, and must refund it within 14 days after someone else enters a contract to buy the property.

Paying money out

Section 25 of the Regulation limits the ways trust money can leave the account to two: cheque or electronic funds transfer. There is no third route.

A trust cheque must be machine-numbered in a series, marked "not negotiable", not payable to cash and signed by the licensee in charge. Cheques are drawn in numerical order. For each one the agency records its number and date of issue, the payee, the amount, the ledger and the person the money was held for, the invoice number where there is one, and the reason for the payment. An accounting system that enters those particulars in the cash book in the same operation as the cheque is drawn is taken to meet the requirement.

An electronic transfer generates an equivalent record: who made the transfer, a reference number, the date, the payee, the amount for each ledger account involved, the ledger details and beneficiary, and the reason. Read with the regulator's rule on approval, the result is that each transfer has both a named approver beforehand and a complete written trace afterwards.

The books an agency must keep

Four records form the core of the system, and the Regulation describes each.

The cash book, in section 27, is a daily record of receipts into and payments out of the trust account, kept with consecutively numbered pages. It shows the numbers of receipts issued or cancelled, of cheques drawn or cancelled, and the reference numbers of electronic transfers. At the end of each named month the licensee balances the cash book, carries the balance forward and prepares a statement reconciling the balance of the trust account at the institution with the cash book.

The journal, in section 28, records transfers between trust ledger accounts that are not made by cheque or electronic transfer. It is kept only for the trust account, and each consecutively numbered entry shows the date, the amounts, the accounts debited and credited, a reference number and the reason.

The ledger, in section 29, gives every client a separate account. Each one carries the person's name and a reference number, and for each transaction the date, a description, the trust record it came from, the amount and the resulting balance. This is the record that answers the question a landlord or vendor is most likely to ask: how much of my money do you hold today?

The trial balance, in section 30, ties the ledger back to the cash book. Within 21 days after the end of each named month, the licensee prepares a statement listing every ledger account that does not stand at zero, with its name, reference and balance, the total of those balances, and a comparison of that total with the reconciled cash book balance. As a worked example, the trial balance for August 2026, a month ending on 31 August, would be due by 21 September 2026. Section 31 adds that within the same 21 days the licensee compiles the original or a true copy of each trial balance for the month and keeps a summary of the total trust money they show.

The Regulation also says where and how the records live. They must be capable of being produced on demand in permanent, legible English, and they are kept at the registered office or, where the business has more than one place, at the place where the relevant business was carried on.

Where the books are kept by computer, sections 33 and 34 apply. The system must log every creation, amendment and deletion of a beneficiary's name, address and reference, of the agency description and of the trust account number, showing the details before and after. Journal entries must balance before they are posted. No program may accept a transaction that puts a ledger into debit unless a record is made at the time and a separate chronological report can be produced on demand. A ledger account can be deleted only at a zero balance and must remain retrievable. Amendments are made by a separate transaction, never by overwriting. The records are backed up at least once each month, either by cloud technology or by another electronic means with the latest copy kept at a different location from the originals.

Agencies that also act as strata managing agents carry extra duties under the same Regulation, including a ledger account that can be identified and separated for each owners corporation or association, and receipts that identify the lot and the period a contribution covers.

Interest and the bank's own duties

Part of the regime falls on the institution, not on the agency. NSW Fair Trading explains that the Act requires approved institutions to calculate interest on agents' trust accounts, pay a prescribed share of it to the Property Services Statutory Interest Account, report monthly to the Secretary and give the Secretary an annual auditor's certificate. Section 21 of the Regulation is the link between the two sides: the institution must use the account's UID when it lodges those monthly returns. The regulator's page does not state the size of the prescribed share, and this guide does not give one.

Two kinds of separate account sit outside that arrangement. Section 35 of the Regulation exempts a separate trust account kept on a client's instructions for that client's exclusive benefit, and a separate account opened for the exclusive benefit of both the vendor and the purchaser of land. NSW Fair Trading confirms that for these accounts the institution need not pay interest to the statutory account or report monthly.

Closing an account and unclaimed money

Closing a trust account starts a short clock. NSW Fair Trading says the licensee must notify it within 14 days after the account is closed, online through the trust account registration, in person at Service NSW or with the notice of closing a trust account form. The form is signed in duplicate, the original is emailed to NSW Fair Trading within the 14 days and the licensee keeps the copy; the regulator no longer accepts originals by post. The closure confirmation notice is kept for 3 years. As a worked example, an account closed on 1 September 2026 would need to be notified by 15 September 2026.

Money that nobody collects follows a different path, and it leads away from Fair Trading. The regulator says unclaimed trust money is handled by Revenue NSW under the Unclaimed Money Act 1995, and that all returns and payments go to the Chief Commissioner. Money becomes unclaimed once it has been held in a trust account for more than 2 years, whatever the amount. A balance that a former tenant left behind on 1 March 2024, for instance, passed that mark after 1 March 2026.

Before that point, the agency has a duty of its own: licensees must make reasonable efforts to find the owner. NSW Fair Trading says failing to do so can attract a penalty of up to A$5,500.

A stricter timetable applies when a licence ends. Money held by a former licensee, or by the personal representative of a licensee who has died, is unclaimed money and must be returned to Revenue NSW within 3 months after the person stopped being a licensee or became the personal representative. The regulator gives the penalty for missing that as up to A$5,500, plus up to A$550 for each additional day. On those maximums, a return made ten days late would carry an upper limit of A$5,500 plus ten times A$550, which is A$11,000; that is arithmetic on the ceiling, not a statement of what is imposed in practice.

The annual audit

Every year the trust records are examined by an outside auditor. NSW Fair Trading says the audit period ends on 30 June, and the report must be submitted within 3 months and no later than 30 September. The auditor lodges it through the Auditor's Report Online portal. The period that closed on 30 June 2026 therefore had its deadline on 30 September 2026, and the period now running ends on 30 June 2027, with its report scheduled to be due by 30 September 2027.

The duty covers anyone who received or held trust money during the period: a licensee, a former licensee or a personal representative of a licensee. For a licensed corporation the regulator says the corporation is generally responsible for seeing that the audit happens. In a partnership only one partner needs to lodge. An agency that stopped trading during the year, or traded for only part of it, must still lodge.

Not every accountant qualifies. Auditors must meet section 115 of the Property and Stock Agents Act 2002, which NSW Fair Trading summarises as registered audit companies, authorised company auditors, and members of a professional accounting body who hold a public practising certificate, with CPA Australia, Chartered Accountants Australia and New Zealand and the Institute of Public Accountants given as examples. Independence is built in. An auditor cannot have been an employee or a partner of the licensee in the last 2 years of the audit period, and cannot be a licensee or a shareholder in a licensed corporation that has fewer than 20 shareholders.

An account that did nothing all year is treated more lightly. Where there were no transactions and the balance was zero for the whole period, the licensee emails the regulator a copy of the bank statement covering the full audit period. Auditors can also submit outstanding reports for the previous 3 years through the same portal.

The regulator describes what that responsibility looks like: telling the auditor before engaging them that the report must be lodged by 30 September, giving access to all records as soon as possible after 30 June, following progress and replacing an auditor who cannot finish in time. Extensions exist only for exceptional circumstances that have lasted over time and can be backed by evidence.

Penalties and the compensation fund

The consequences rise with the seriousness of the failure. At the lower end are fixed fines and set maximums for administrative lapses. At the top are court penalties, which NSW Fair Trading's notice on changes to property and stock agents laws, published on 8 July 2026, says were raised from 29 June 2026.

The late audit carries more than the fine. NSW Fair Trading says a person who fails to lodge on time becomes a disqualified person under the Act and is exposed to disciplinary action, and that a licence may not be renewed until the report is lodged. The fine is described as something the regulator may issue instead. The record-keeping sections of the Regulation, from receipts to back-ups, carry their own maximum of 40 penalty units for a corporation and 20 penalty units otherwise.

Behind the whole system stands the Property Services Compensation Fund, administered by NSW Fair Trading. The regulator's conveyancing page for buyers and sellers says a client may be able to claim from it where money entrusted to a licensee is dealt with dishonestly. Since 29 June 2026, according to the July notice, Fair Trading can also require a person to indemnify the fund as a disciplinary measure, so that the cost of a claim can be brought back to the person whose conduct caused it.

A trust account is built so that every dollar has an owner, an approver and a written trail, and so that someone outside the agency reads that trail once a year.

Kooky, from Shaka

Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

About Kooky and Shaka →