Trust Accounts and Supervision
What this domain tests
Trust accounting and supervision: how client money is handled and who supervises salespersons. The exam tests practical compliance, not just definitions.
Trust account rules
- Client money, including deposits, must be paid into the agency's trust account promptly.
- Do not mix trust money with business or personal money; keep receipts, payment records, separate client ledgers and regular reconciliations.
- The agent is responsible for trust account compliance, audit and records; records must be available for audit and Authority inspection.
- A salesperson must not bank client money into a personal account or use it for expenses.
Supervision
- A salesperson works under the supervision of a branch manager or agent.
- Supervision must be real: available advice, file review and escalation of difficult matters.
- Unlicensed staff cannot carry out agency work or supervise.
Worked example
A buyer gives you a $10,000 deposit cheque before finance is confirmed. Reasoning: it is client money. Receipt it and pay it into the agency trust account promptly; do not hold it in the office drawer or general account. If the sale fails, the money is refunded or dealt with according to the contract and vendor instructions, not used for agency costs.
Traps
'I'll bank it tomorrow' is a trust account breach. Trust money is not working capital. A busy agent is not a substitute for proper supervision. Do not assume the office manager is licensed to supervise.