How a South Australian land agent must hold and audit client money

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Kooky

Builder of Shaka, the payment router that pays every agent their commission on closing date.

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A deposit on a house, a month of rent collected for a landlord, the proceeds of a business sale: for a short time, each of these sits with a land agent who does not own it. In South Australia the rules for that interval are in Part 3 of the Land Agents Act 1994, headed "Trust accounts and indemnity fund", and in the Land Agents Regulations 2025, which the South Australian legislation register shows as made and in force from 7 August 2025. The regulator is the Commissioner for Consumer Affairs, whose office is Consumer and Business Services. The text of the Act used throughout this guide is the authorised version dated 1 February 2019, which is the one the South Australian legislation site serves as current. Whether a later amendment has changed it was not confirmed, so every section and penalty of the Act quoted below is that of the 2019 version.

This guide follows the money in the order the Act does: what counts as trust money, the account, receipts, books and payments, the interest, the yearly audit, and what happens when money is missing. Everything here is South Australian law only.

Land Agents Act 1994 (SA), sections 13, 21 and 22, and Land Agents Regulations 2025, regulation 24(8).

What the Act means by trust money

Section 12 of the Land Agents Act 1994 defines trust money as money received by an agent in the course of acting as an agent, to which the agent is not wholly entitled both at law and in equity. The test is entitlement, not the label on the payment. Until the agent is wholly entitled to a sum, it is trust money.

Section 12 also defines a second term that returns at the end of this guide. A fiduciary default is a defalcation, misappropriation or misapplication of trust money that happens while the money is in the possession or control of an agent, or of a firm of which the agent is a member. It is the event the Agents Indemnity Fund exists to cover.

Opening the account and whose name it carries

Section 13(1) of the Act sets three conditions for the account that receives trust money. It is held at what the Act calls an ADI. Consumer and Business Services, in its information sheet "Working as a land agent in SA" (version 3.0, September 2025), puts this as a bank, building society or credit union. The account is in the name of the agent. And it is an account approved by the Commissioner.

Section 13(4) lets the Commissioner approve classes of interest-bearing accounts by notice given to an ADI, and vary or revoke that approval.

Receipt forms and cheques must be marked with the name of the agent and the words "Trust Account", under regulations 17 and 18. The audit checklist published by Consumer and Business Services in April 2025 adds that a statement of the account details on record is sent with the annual return, and that a new trust account can be notified online. The pages read for this guide did not set out a deadline for that notification.

Banking: as soon as practicable, and nothing else in the account

The Act does not count days. Section 13(1) requires trust money to be deposited "as soon as practicable" after it is received. What is practicable depends on the circumstances of the receipt, which is why the general rule cannot be turned into a fixed number for every case. The maximum penalty for failing to bank in time is A$20,000.

The duty is drawn widely. It applies to the agent, to a sales representative, to a property manager and to any other person who receives trust money in relation to an agent. A property manager who collects a rent payment, or a sales representative handed a deposit at an open inspection, is bound in the same way as the principal of the agency.

Section 13(2) then closes the account in both directions. A person who can deal with a trust account must not pay money that is not trust money into it, and must not withdraw from it except as Part 3 permits. The maximum penalty is A$20,000. Mixing the agency's own funds with clients' money is therefore an offence in itself, whether or not any client loses anything.

Receipts in, payments out

Section 21(2) of the Act requires an agent who receives trust money to give the payer a receipt in the prescribed form and to keep a copy as part of the agency's records. Regulation 17 supplies the detail. Receipts are written on consecutively pre-numbered duplicate forms carrying the agent's name and the words "Trust Account". Each one states:

• the date;
• the name of the person paying;
• how the money was paid (cash, cheque, bank cheque or electronic transfer) and, for a cheque, the name of the drawer;
• the name of the person for whom the money is received;
• brief particulars of the purpose of the payment;
• the amount.

Timing differs by method. A receipt for cash or a cheque is made out immediately. A receipt for an electronic transfer is made out once the agent has official confirmation that the payment has been made. A breach of the timing rule carries a maximum penalty of A$2,500 under the Regulations.

An agency whose software numbers receipts automatically in sequence does not need the paper forms. Rent paid under the Residential Tenancies Act 1995 into the trust account is exempt from the receipt requirement by regulation 14.

The client has a second right under section 21(3). Any person with an interest in trust money may ask the agent for a statement of the dealings with it, and the agent must provide one. Refusal carries a maximum penalty of A$20,000.

Payments out are just as tightly drawn. Section 14 of the Act is a closed list. Money leaves a trust account only to:

• pay the person entitled to it, or pay as that person directs;
• satisfy the agent's own claim for commission, fees, costs or disbursements;
• satisfy an order of a court or of the Tribunal;
• be paid into a court or the Tribunal;
• be dealt with as unclaimed money under the Unclaimed Moneys Act 1891;
• make any other payment authorised by law.

The Regulations then govern the method. Regulation 18 forbids paying trust money in cash, with a maximum penalty of A$2,500. A trust cheque carries the agent's name and the words "Trust Account"; the agent either crosses it and marks it "Not negotiable" or obtains a receipt from the payee. Records are kept of cheques and electronic transfers, including the name, number and BSB of the receiving account.

Commission has its own clock. Under regulation 23, once the agent becomes entitled to trust money for commission, fees, costs or disbursements, it must be transferred to the agency's office account as soon as practicable and in any case within 3 months. As a worked example, assume an agent becomes entitled to commission on 10 March: the money has to be out of the trust account by 10 June at the latest. A breach carries a maximum penalty of A$2,500.

The books behind the account

Section 21(1) of the Act requires detailed records that enable the trust account to be audited. The Regulations name the books.

Regulation 20 requires a cash receipts book and a cash payments book. Entries are made in order and within 2 working days; where the money moved electronically, the 2 working days start when official confirmation arrives. As a worked example, assume a cheque is received on a Thursday in a week with no public holiday: the entry is due by the end of the following Monday.

Regulation 21 requires a separate trust ledger account for each client, and a transfer journal. The same 2 working days apply.

At the end of each month regulation 22 requires two reconciliation statements: one setting the cash books against the balance of the trust account, the other setting the total of the client ledger balances against that same balance.

Software is allowed and regulated. Under regulation 15 the agency makes an electronic copy within 24 hours of any alteration and stores a monthly copy off the premises; the regulation accepts cloud storage. All records, paper or electronic, stay legible for at least five years under section 21(4) of the Act.

Where the interest goes

Clients do not receive the interest on a South Australian land agent's trust account, and neither does the agency. Section 15 of the Act requires the ADI to pay the interest on trust money to the Commissioner on the days fixed by regulation. Regulation 16 gives the institution two timetables: 15 January, 15 April, 15 July and 15 October each year, or the 15th day of every month.

The money goes to the Agents Indemnity Fund, the subject of section 29. Fines imposed in disciplinary proceedings, money recovered after a fiduciary default and the fund's own investment returns are paid in as well, but the claim guide of Consumer and Business Services, dated April 2015, describes trust account interest as the main source.

Section 29(4) lists what the fund may be spent on. Paying claims is one use among several: the fund also meets the cost of investigations, conciliation, disciplinary proceedings and prosecutions, and of the administrators and examiners the Commissioner appoints. With the Minister's approval it may pay for education programs. The Auditor-General audits its accounts at least once in each calendar year under section 41.

The annual audit and the declaration that replaces it

Section 22(1) of the Act requires every agent who maintains a trust account to have its accounts and records audited for each audit period and to lodge an audit statement with the Commissioner.

The period is tied to the agent's own registration, not to the financial year. Under regulation 24(1) it starts when the last period ended, or on registration for a new agent, and it ends 2 months before the next annual return is due, unless the Commissioner fixes another date at the agent's request. Regulation 24(8) then gives 2 months from the end of the period to lodge. The audit checklist of Consumer and Business Services gives its own example: for a registration expiring on 30 June 2025, the period runs from 1 May 2024 to 30 April 2025. Applying regulation 24(8) to that example, the statement is due within the two months that follow 30 April 2025. The Commissioner may allow longer by written notice, and the checklist says an extension can be applied for online.

Not every accountant may sign. Section 12 defines an auditor as a registered company auditor under the Corporations Act 2001 of the Commonwealth, or a person who meets the prescribed requirements. Regulation 13 prescribes them: a relevant degree; membership of Chartered Accountants Australia and New Zealand or CPA Australia; meeting that body's requirements to practise as a public accountant; and at least 3 years of continuous practice as a public accountant in South Australia. Regulation 28 adds an independence rule. A person who is an employee or partner of the agent, or was one within the previous 2 years, may not audit that agent's accounts, and neither may an employee of another agent or a person carrying on business as an agent.

The notice in the second step comes from regulation 25. It is certified by the agent; in a firm, by at least 2 partners; in a company, by at least 2 directors, or by the sole director.

An agent with nothing to audit is not released from the yearly cycle. Section 22(1a) says that an agent who held no trust money during an audit period need not have an audit, but must lodge a declaration setting out the reasons. Section 22(2) says the same for an agent who maintained no trust account at all. The declaration is lodged within the same 2 months as an audit statement would be.

The consequence in the callout is separate from the fine. Failing to have the audit carried out, or to lodge on time, is an offence under section 22(3) with a maximum penalty of A$20,000. The cancellation under section 22(5) follows from the unanswered notice, and the Commissioner must then tell the agent that it has happened.

Closing an agency triggers a last audit. Under regulation 26 an agent who ceases business has the accounts audited up to the date the trust affairs are wound up, and lodges the auditor's statement within 4 months of that date.

Deficiencies: who has to tell the Commissioner

The reporting duties in the legislation read for this guide sit with two outsiders, not with the agent. Section 25 of the Act requires an ADI that becomes aware of a deficiency in a trust account to report it to the Commissioner as soon as practicable and in any event within 14 days, with a maximum penalty of A$20,000. Regulation 24(6) requires an auditor to report promptly, to the Commissioner and to the agent, on finding records that cannot be properly audited, dishonesty or a breach of the law, a loss or deficiency of trust money or a failure to pay or account for it, or a failure to comply with the Act or Regulations. Neither provision names the agent as the person who must report, and no separate self-reporting rule appeared in the Act or the Regulations as read.

There is a small tolerance for honest slips. Under regulation 24(7) the auditor's duty to report a loss does not apply to inadvertent losses that are promptly made good and do not total more than A$100 in any 3-month period.

Once the Commissioner knows, the Act offers several tools. An examiner may be appointed under section 23 to go through the accounts. Under section 16 the Commissioner may appoint an administrator of the trust account on knowledge or reasonable suspicion of, among other grounds, a fiduciary default or irregular operation of the account; once notice is given, withdrawals from the account are barred, with a maximum penalty of A$20,000. An appointment lasts up to 12 months, and the agent has 28 days from notice to ask the South Australian Civil and Administrative Tribunal to review it.

Claiming on the Agents Indemnity Fund

Section 30 of the Act gives a claim to any person who suffers a pecuniary loss as a result of a fiduciary default. The Act sets no fixed dollar cap. The amount is the actual loss, plus the reasonable legal expenses of trying to recover it, less whatever has been recovered or can reasonably be expected to be recovered elsewhere. One bar applies: there is no claim if the agent was required to be registered and the claimant knew, or ought to have known, that the agent was not.

The fund is a last resort. The South Australian government's consumer page on these claims, last updated on 18 April 2024, says a claim can be made where there is no reasonable way of recovering the money owed. Section 32 of the Act lets the Commissioner require a claimant to try to recover the loss first.

The same page describes the path: the claimant applies online, Consumer and Business Services assesses the claim, the Crown Solicitor's Office reviews it and makes a recommendation, and the regulator decides. An appeal, on that page, goes to the South Australian Civil and Administrative Tribunal. Under section 32 the agent is notified and both sides may make submissions. Regulation 30 requires a progress report at least every 6 months.

On two points the published sources do not match, and both versions are set out here. The claim form and guide of Consumer and Business Services, dated April 2015, says there is no time limit to lodge a claim and that an appeal lies to the District Court within 3 months. Section 35 of the Act, in the authorised version dated 1 February 2019, gives review by the Tribunal within 3 months of the notice of determination, and the South Australian government page updated on 18 April 2024 names the South Australian Civil and Administrative Tribunal as the place of appeal. On time, section 31 lets the Commissioner publish a notice fixing a closing date for claims about a particular default, no earlier than 3 months after publication.

Delay is compensated. Under section 37 an entitlement bears interest from the first anniversary of the day the claim was lodged, at the rate in regulation 31, which is 5 per cent a year, without compounding. As a worked example, assume a claim lodged on 1 March 2024, determined at A$40,000 and paid on 1 March 2026. Interest runs for the one year from 1 March 2025: 5 per cent of A$40,000 is A$2,000, so the payment is A$42,000. If the fund could not meet every entitlement, section 40 has the Commissioner reduce payments proportionately.

Penalties and discipline

Part 3 uses one figure, A$20,000, for nearly every offence, including the record, receipt and retention duties of section 21 and obstruction of an auditor under section 28, and a much larger one for taking the money.

Section 60 adds a daily penalty for a continuing offence of up to one-tenth of the maximum; for an offence capped at A$20,000, one-tenth is A$2,000 a day.

Discipline runs alongside prosecution. Under section 47 the Tribunal may reprimand, fine up to A$20,000, impose conditions, cancel a registration or disqualify a person. A fine imposed this way is paid into the indemnity fund. Where a person has been found guilty of the offence in section 13(3), section 47(1a) requires the Tribunal to cancel the registration and disqualify the person, unless the offence was trifling or committed in exceptional circumstances.

In South Australia the bank and the auditor are each bound to tell the Commissioner about a shortfall, whatever the agency itself chooses to say.

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 →