Introduction to trust accounts

Question 1

What is a trust account?

Answer 1

• A trust account is money received on behalf of someone else
• Not ours - transit lounge for the money
• Deposit received from the buyer on behalf of the seller
• Rent received from a tenant on behalf of the landlord
• Money in must equal money outing balance to 0
• Never allowed to be overdrawn

Question 2

Regulations of trust accounts

Answer 2

-Legislated by the agents administration and regulation act

Question 3

When to complete a trust account receipt

Answer 3

• Written immediately upon receiving the money
• If received electronically - as soon as you are aware
• Nowadays through software programs

Question 4

Banking money received

Answer 4

-Section 9 of the AFFAA states that a licensee must bank any trust money received into the trust account before the end of the first business day after receiving the amount

Question 5

Permitted payments out of a trust account

Answer 5

-Money goes into the trust account but also comes out
-Paying an invoice or account for lessor
(authorised by property manager)
-All payments must be authorised in your form 6 appointment of agent
-Refunding a deposit to the buyer if a contract is not proceeding