What are The Basic Regulations of Trust Accounts in Victoria?

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WELCOME
TO
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What are The Basic Regulations of Trust
Accounts in Victoria?
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Regulations are the basics of business growth. As
a real estate agent, you must audit your trust
accounts once a year. Otherwise, without lodging
your audit report, you cant renew your license
from Consumers Affairs Victoria. The objective
of a trust account is clear- to keep track of
all the payments and transactions of an agency
and flexible settlement of the business. To
understand the trust accounts, agents must know
the basic use and regulations of trust money and
accounts in Victoria to get the most out of
their accounting.
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Overlook on a Trust Account
When agents receive money from their clients,
they need to deposit it into a trust account as
per Australian law. You have to open one or
multiple accounts (depending on the companys
requirement) to keep rent, sales commission, and
the fee for maintenance and advertising. The law
of Consumers Affairs has stated that it may
cause a penalty if you dont keep the trust
money in the trust account. The earnings apart
from trust money will be kept in a general
account and not the trust account. When opening
the trust account, the name of the account must
match the name of the registered agency or under
which the license is issued. You have to
register on myCAV, and your account will be
opened within 14 days. This trust account should
be opened with an authorized organization such
as a bank, credit union, or building society
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Receiving Money and Payments in a Trust Account

• Keeping the money in a real estate trust account
  involve strict timeframes. Once an agent
  receives the money, they must deposit it into
  the trust account by the next business day. In
  case the real estate company is far from the
  financial institution, they can submit it on the
  third business day. Receipts are issued for the
  money so that agents can keep track of payments
  deposited into their accounts.
• Once the money is deposited to a trust account,
  then it is paid to the owner of that money
  landlord or seller.
• While withdrawing, the commission of the agent or
  agency is paid when transferring the remaining
  payment to the entitled person in the form of
  electronic funds or cheque.

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Accounting of the Trust Money

• This is not unknown that you need an accounting
  of your trust money accurately or it will result
  in unwanted outcomes such as penalty or
  cancellation of license. It is, therefore,
  crucial to keep the complete details. While
  accounting your trust money, you need a record of
  the money, i.e., who is entitled the money, what
  are the dates of transactions, and also the
  details of all transactions. It is required to
  update the information of every transaction
  after the next working day.
• Additionally, an agency needs to keep the records
  for at least seven years. You have to take the
  backups on a weekly or monthly basis. In case
  you need any help with the accounts, your trust
  account auditor will help you 4 the details.
  Consult the best trust account auditors to be
  aware of all the requirements.

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Real Estate Trust Account Auditing
As per Consumer Affairs Victoria (CAV), all the
real estate agencies must audit their trust
accounts once a year. The regulations
require Auditing the accounts from 1 July to 30
June every year The audit must be done within
the 30 days after the financial year Audit must
be carried out by an approved auditor in
Victoria The audit report must be approved from
the CAV director. To keep this convenient, the
agency needs to provide proper information to
the auditor. This includes The statements,
records, receipts, books, and everything related
to the finances. Details of securities and
deposits held as trust money Get a copy of the
audit report signed for seven years in order to
create the report when required
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