Real estate trust account audit
Real estate agents in Australia are required to maintain trust accounts for all monies received on behalf of clients, including deposits, rent, and bond monies. Trust accounts are regulated under state and territory property legislation and must be audited annually by a qualified auditor. This checklist prepares agents and their legal advisers for trust account audits and ongoing compliance.
This is a 12-step trust account audit checklist for Australian real estate agents. It covers trust account reconciliation, record-keeping obligations, authorised disbursements, and annual audit requirements under state property legislation.
The checklist
Verify trust account authorisation
Confirm the trust account is maintained at an authorised deposit-taking institution and the account is properly designated as a trust account.
Check trust account signatory controls
Verify that only authorised persons are signatories on the trust account and that dual-signatory requirements are met for disbursements where required.
Reconcile trust account monthly
Review monthly trust account reconciliations comparing the bank statement balance, cash book balance, and individual client ledger balances.
Audit trust receipts
Test a sample of trust receipts to confirm monies were deposited within the required timeframe (typically the next business day) and correctly recorded.
Review disbursement authorisations
Verify all disbursements from the trust account are supported by proper authorisation, including vendor instructions for deposit releases and landlord instructions for rent payments.
Check interest on trust accounts
Confirm interest earned on general trust accounts is paid to the relevant state statutory interest account (e.g., Rental Bond Board, interest account) as required by legislation.
Verify bond lodgement compliance
Review bond receipts and lodgements to confirm rental bonds are lodged with the relevant state bond authority within the prescribed timeframe.
Review overdrawn ledger balances
Identify any individual client ledger accounts that show overdrawn balances and investigate the cause, as overdrawn ledgers indicate potential trust breaches.
Check compliance with record-keeping requirements
Verify trust account records including cash books, ledgers, receipts, and journals are maintained for the required retention period (typically 3 to 7 years depending on jurisdiction).
Review unclaimed trust monies procedures
Identify any trust monies held for extended periods and confirm compliance with unclaimed monies provisions requiring transfer to the state revenue office.
Prepare for the annual trust account audit
Compile all records, reconciliations, and supporting documents for the annual audit by a qualified auditor and submit the audit report by the statutory deadline.
Document findings and remediation actions
Record any discrepancies, compliance gaps, or auditor recommendations and implement a remediation plan with assigned responsibilities and deadlines.
When this checklist applies
Use for monthly trust account reconciliation checks, annual audit preparation, or when investigating trust account discrepancies for a real estate agency client.
Common pitfalls
- Trust deposits not banked within the required timeframe
- Overdrawn client ledgers not identified and corrected promptly
- Rental bonds not lodged with the bond authority within the statutory period
- Trust account reconciliations not prepared monthly or containing unresolved items
- Unclaimed monies not transferred to the state revenue office as required
Run this checklist on a real matter
Quillio can review trust account reconciliations, flag overdrawn ledgers, and track audit deadlines for real estate agencies. See /practice-areas/property-lawyers or start a free trial.
General guidance for real estate trust account audits. Trust account requirements vary by state and territory — verify against the applicable property agents legislation.
Use this checklist on your matter.
Quillio can run this checklist on a specific NSW conveyancing matter — confirm each item, calculate adjustments, and generate the supporting documents. The free trial requires no credit card.
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