In addition to requiring trust account audits to be lodged online – NSW Fair Trading has started new trust account provisions in the Property, Stock and Business Agents Act 2002 (NSW) (PSBA Act).

The amendments were set out in Schedule 5 (specifically, 5.2 and 5.3) of the Fair Trading Legislation Amendment (Reform) Act 2018 (NSW), but have now been repealed in that Act and, instead, appear in the PSBA Act.

New sections

Among the amendments, a new section 16(1)(o) has been included in the PSBA Act that defines a disqualified person as one that fails to comply with section 111 to have an audit of the records and documents relating to trust money carried out within the required time. However, the Secretary may determine that in the circumstances that failure should not disqualify the person.

Additionally, new sections 116(1) and (1A) now require an auditor to provide the Commissioner with a copy of an audit report within 14 days after providing the report to the licensee. The auditor must highlight in the report details of a contravention of the PSBA Act or PSBA Regulation, a discrepancy relating to the trust money or if the records or documents make it difficult to properly audit them.

New section 116(4) now makes it an offence for an auditor to, without reasonable excuse, fail to comply with the requirements in section 116. Failure carries a maximum penalty of $5500 (50 penalty units).

Repealed and replaced

Three sections of the PSBA Act have been repealed, including section 111(1A) and (4), and section 42(2), which removes the requirement for a licensee to keep records of employees for at least three years after a person ceases to be an employee.

Section 111(1) has been replaced with a requirement for a licensee, their personal representative or a former licensee to cause an audit to be carried out by a qualified auditor in respect of their trust account within three months after the end of the relevant audit period.

NSW Fair Trading has previously attempted to rectify the issues created by the trust account provisions by way of Item 40 of Schedule 1 to the Property, Stock and Business Agents Amendment (Property Industry Reform) Act 2018 (Industry Reform Act). On July 01 2019, Item 40 of Schedule 1 to the Industry Reform Act was repealed as a consequence of the amendments made to the trust account provisions in the PSBA Act.

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