Trust... Accounts
Trust…
Accounts….
I kind of got mentally and practically stuck on trust accounts yesterday, as did the amazing Leanne Prinsloo who works with us and handles our trust account. She was certainly having a challenging day in this space too.
When I was trading property, I made a few deposits through the New Zealand Real Estate Trust (NZRET). I didn’t like the look of it then, and I thought the process was painful.
As a real estate agency, we also use it. I don’t like the look of it now either, and the process from our end is painful…. Luckily, we have Leanne, who is an expert in using it.
Although it’s government endorsed and backed which is great, it’s often awful to use. The parts of the process that our purchasers use and see to pay deposits are very unattractive and not co-branded at all. The rules seem finicky.
But you know what, I can’t get my hands on the money unless all the processes are checked. The key word here is Trust. Inbuilt in the painful and finicky structure of the NZRET is trust.
If someone puts money in a real estate agent, or a lawyer’s trust account, the money does not belong to the lawyer or the real estate agent.
So yesterday, amongst all settlements and deposits and deposit releases, some money was sent from another agency’s Trust Account to us. It was done to try and quickly fix a mistake, and it wasn’t done maliciously or with criminal intent. But… it was still non-compliant, if not illegal. It was not our money. It should never have been sent. We didn’t want it. It was a breach of trust. It was a breach of trust account rules on their part, not to mention AMLCFT legislation (Anti Money Laundering and Combating the Financing of Terrorism).
But it got me thinking, I would not be able to do this. With all its faults, I would need a huge amount of complicity from multiple actors to move funds to where they shouldn’t be within the NZRET system, if I had a mind to. Even if someone held a gun to my head I would not be able to release our client’s funds.
Your average real estate agency has a trusted staff member handling the trust account, but there is a pretty interesting gap there that relies on people playing by the rules, which we know they don’t always do…
