In this article
Kooky
Builder of Shaka, the payment router that pays every agent their commission on closing date.
About Kooky and Shaka →Every week Queensland real estate agencies receive money that does not belong to them. A buyer's deposit, a tenant's rent, a seller's advertising contribution: each is paid to the agency and held for someone else. The law treats that money differently from the agency's own, and surrounds it with rules, audits and, as a last resort, a State fund that repays people who lose money through an agent's wrongdoing.
This guide explains how that system works from the point of view of the person whose money it is. It covers what a trust account is, the rules the Agents Financial Administration Act 2014 places on it, how it is audited, what a client can check for themselves, and how a claim on the fund is made. It uses the Office of Fair Trading's published guidance and the Act. Cases of misappropriation are rare against the number of transactions, and they are described here only as far as the Office of Fair Trading's own statements describe them. It is general information, not advice on a claim.
Sources: Agents Financial Administration Act 2014 (Qld); Office of Fair Trading, "Make a claim for financial loss".
What trust money is
Trust money is money an agent receives on behalf of someone else in the course of acting as an agent. In a sale the main example is the deposit. Under the standard REIQ contract for houses and residential land, the deposit is dealt with in clause 2 and is paid to the deposit holder named in the contract, usually the seller's agent. It belongs to neither the agent nor, until settlement, the seller. The agent holds it as stakeholder.
Related readLand banking and option deeds: testing a Queensland land offerIn property management the trust money is the rent collected for owners, along with amounts held to pay rates, repairs and other outgoings on the owner's behalf. A rental bond is a separate case: it must be lodged with the Residential Tenancies Authority within 10 days and is not kept in the agency's account.
What makes money "trust money" is not its size or its label but the capacity in which it was received. Once received in that capacity, it has to be handled under the Act.
How a trust account is set up
The Agents Financial Administration Act 2014 governs how licensed property agents, along with motor dealers, auctioneers and debt collectors, handle other people's money. It is administered by the Office of Fair Trading, the same body that licenses agents under the Property Occupations Act 2014.
Under section 9 of the Act, only a principal licensee may open a trust account, and the account must be identified as one. The Office of Fair Trading has to be told when an account is opened or closed. The account is held at a financial institution in Queensland, in the name of the agency, with "trust account" in its title.
The purpose of these formalities is separation. A trust account is not part of the agency's working capital. It cannot be used to pay wages, rent or the agency's own bills. If the agency fails as a business, the money in its trust account is not available to its creditors, because it was never the agency's.
The rules on money going in and coming out
The Act's rules can be read as a sequence: what happens when money arrives, what may be in the account, and when money may leave.
Related readMoney sent to the wrong account: the first hours and who to tell| Rule | What it requires | Section |
|---|---|---|
| Who may open | Only a principal licensee | 9 |
| Banking | Trust money paid in before the end of the next business day | 16 |
| No mixing | No money other than trust money in the account, with narrow exceptions | 18 |
| Drawing | Fees and expenses drawn only when authorised | 22 |
| Disputes | A set procedure where two parties claim the same money | 26 to 28 |
| Audit | An auditor appointed, with regular reports | 30, 35, 36 |
A summary of selected provisions. The Act and the Office of Fair Trading's guidance set out each rule in full.
The banking rule is the one a client is most likely to see in action. Section 16 requires an amount received to be paid into the trust account before the end of the next business day. A buyer who pays a deposit by transfer directly into the trust account has done the banking themselves. A buyer who hands over a cheque should see it presented promptly.
The rule against mixing, in section 18, keeps the account clean. The agency's own funds stay out of it, apart from limited cases such as a single payment that includes both trust money and the agent's fee, which must be separated within a short period.
Money leaves only as the Act allows. An agent may draw commission and authorised expenses once entitled to them. A sale deposit is released in line with the contract, ordinarily at settlement, when it goes to the seller less the agent's agreed commission and costs. Breaches of the banking and drawing rules carry maximum penalties of 200 penalty units, and for several of them up to two years' imprisonment.
When two people claim the same money
Deposits are sometimes disputed. A contract is terminated, the buyer says the termination was valid and wants the deposit back, and the seller says the buyer defaulted and the deposit is forfeited.
The agent holding the money is not the judge of that dispute, and the Act says so in effect. Sections 26 to 28 give the agent a procedure. Where the agent becomes aware of a dispute about who is entitled to an amount, the agent must not simply pay one side. The agent may give the parties written notice of an intention to pay a named party after 60 days unless a legal proceeding is started. If a proceeding is started, the money is dealt with as the court or tribunal directs.
Related readPayment redirection scams in property sales: the checks that stop themFor a buyer or seller, the practical meaning is that a disputed deposit stays where it is, protected, while the argument is resolved. Neither party can pressure the agent into releasing it, and the agent has a lawful answer to both.
How a trust account is checked
A rule that nobody checks is a weak rule. The Act builds in three layers of checking.
The first is the agency's own records. Every receipt and payment must be recorded, receipts issued, and the trust ledger reconciled against the bank statement. A well-run office does this monthly as routine, and software now does much of the arithmetic.
The second is the external auditor. Under section 30 an agent must appoint a qualified auditor within a month of opening a trust account. Under section 36 the auditor carries out two unannounced examinations of the account each year, or one where the agent has been operating for less than six months. Under section 35 the auditor's report for each audit period must be lodged within four months of the end of the audit month, and the Office of Fair Trading receives it.
The third is the regulator. The Office of Fair Trading has inspectors who can enter an agency, examine its records and require explanations, and it reviews audit reports for signs of trouble such as late banking, unreconciled balances or an auditor's qualified opinion.
The auditor arrives without warning, twice a year
The Act requires each trust account to be examined by an independent auditor on two unannounced occasions a year, in addition to the annual audit report sent to the Office of Fair Trading. The dates are the auditor's choice and the agency is not told in advance.
What the rare failures look like
The system fails occasionally, and the Office of Fair Trading publishes the outcomes when it prosecutes. The most recent example it has reported was a sentence handed down in the Brisbane District Court on 18 March 2026, announced on 24 March.
Related readProperty spruikers in Queensland: seminars, commissions and the rulesAccording to the Office's statement, a Brisbane agent was sentenced to four and a half years' imprisonment, suspended after eight months in custody, on three counts of fraud. More than $131,000 had been misappropriated. The larger part, $116,376, left a trust account over about seven years, between January 2013 and June 2020. A further sum of more than $15,000 came from former tenants paying break-lease fees and utility charges. The statement records that $54,517 had been repaid and more than $77,000 was still outstanding at sentencing.
"Real estate professionals are trusted by the community to work with large sums of other people's money," the acting Fair Trading Commissioner, Craig Turner, said in the statement.
Two things about the case are instructive. The amounts were small individually and spread over a long time, which is the pattern audits are designed to catch and which the unannounced examinations exist to make harder. And the outcome was a prison sentence. Taking trust money is prosecuted as fraud under the Criminal Code as well as being a breach of the Act, and the Office can also seek to have a person disqualified from holding a licence.
What a client can check
A client does not need to audit an agency to gain some assurance. A few ordinary observations go a long way.
The agency should be licensed. The Office of Fair Trading's public register shows whether a licence is current and in whose name. The account a deposit is paid into should be described as a trust account and held in the agency's name, not in the name of an individual.
Related readRental scams in Queensland: the warning signs before you pay a bondA receipt should follow. An agent who receives trust money issues a trust receipt identifying the amount, the payer and the purpose. For a deposit paid by transfer, the buyer's solicitor will usually ask the agency to confirm receipt in writing.
Owners with a managed rental should receive regular statements showing rent collected, fees deducted and the amount paid to them, and those statements should match what arrives in their bank account on the dates expected. An owner who notices rent arriving late or in odd amounts, without explanation, has grounds to ask.
Before paying anything, the account details themselves should be confirmed by phone with the agency on a number found independently. This has nothing to do with the agency's honesty. It guards against a third party sending false details in the agency's name, which is a far more common way for a deposit to go missing than any wrongdoing by an agent.
What the claim fund is
Queensland maintains a claim fund under the Agents Financial Administration Act for people who lose money through the conduct of an agent. The Office of Fair Trading administers it. It is a safety net of last resort, and it is what repays a client when an agent has taken trust money and cannot repay it.
The Office's guidance lists who can be claimed against: real estate agents, resident letting agents, motor dealers, auctioneers, debt collectors and process servers, and their employees. It lists the kinds of loss that qualify. They include trust account mishandling, such as rental income not paid to the owner; stolen or misused money or property; a deposit not returned when a contract is ended during the cooling-off period; and bond money not forwarded to the authority that should hold it. Section 82 of the Act is the source of the entitlement.
Related readTitle fraud: how Queensland's register protects an owner's homeThe same guidance lists what does not qualify. A claim cannot be made for poor service or negligence. It cannot be made for a dispute with a property developer. It cannot be made where the agent invested trust money with the client's prior agreement. The fund answers for dishonesty and for breaches of the trust rules, not for a sale that went badly.
A person who is paid from the fund is not the end of the matter for the agent. The State can recover what it paid from the person responsible, and a successful claim has consequences for their licence.
How a claim is made
The Office of Fair Trading sets out the steps, and the time limits are the part most worth knowing early.
- Raise it with the agencyTry to resolve the matter through the agent's own complaint process first, and keep a record of what was said.
- Lodge the claim formSend the "Claim against the claim fund" form to the Office of Fair Trading's Claims and Recoveries unit. There is no fee.
- Meet the time limitWithin one year of learning of the loss, and no more than three years after the event that caused it.
The Office decides whether a claim has been made in time. A person who is out of time can ask the Queensland Civil and Administrative Tribunal for an extension, but should not count on one. An owner who suspects rent has gone missing, or a buyer whose deposit has not been returned, is better served by acting at once than by waiting to see whether the agency puts it right.
The claim must name the right legal entity. Agencies often trade under a name that differs from the company or person holding the licence. The Office's guidance suggests checking the business names register kept by ASIC to find the legal name behind a trading name.
Supporting documents carry the claim: the contract or management agreement, receipts and bank records showing the payment, statements from the agency, and correspondence. Where there has been a police complaint or a prosecution, its details help, though a claim does not depend on a conviction.
Where the fund stops and other protections begin
The claim fund covers loss caused by an agent or an agent's employee. It does not cover a loss caused by a stranger.
That boundary matters because the most common way for a deposit to disappear today involves no agent wrongdoing at all. A buyer receives an email that appears to come from the agency with trust account details, pays, and later learns the details were false. The agency never received the money. Nothing was misappropriated from its trust account, and the fund's categories of loss do not fit. The buyer's remedies lie with their bank, the police and, depending on the facts, a claim against whichever business allowed its email to be used.
Solicitors and conveyancers are covered by a separate system. Their trust accounts are regulated under the Legal Profession Act 2007 and supervised by the Queensland Law Society, with their own fund for defaults by a law practice. Money held by a law firm for a settlement is not within the property agents' claim fund.
A newer layer sits alongside. Since 1 July 2026, agencies that sell property are also subject to the federal anti-money-laundering regime supervised by AUSTRAC. That regime is about the origin of the money coming into a transaction, and it adds its own scrutiny of cash and of unusual payments, though its purpose is different from the protection of clients' funds.
The proportions to keep in mind
Queensland agencies handle very large sums through trust accounts every year, and the cases that reach the courts are few. The Office of Fair Trading's own releases describe them as breaches of the trust the community places in the profession.
A trust account does not rely on anyone's good character. It relies on separation, a record of every dollar, and an auditor who does not say when they are coming.
For the person whose money it is, the practical points are short. Pay only to an account named as a trust account, after confirming the details by voice. Expect a receipt. Read the statements. And if money that should have arrived has not, raise it immediately, because the time to claim on the fund starts running from the day the loss is known.
Kooky, from Shaka
Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.
