Fine for Broome real estate agent after employee makes unauthorised withdrawal (Anthony J Hutchinson Pty Ltd / Hutchinson Real Estate)
A Broome real estate agent was fined $6,000 by the State Administrative Tribunal (SAT) on 10 August 2018 for failing to properly supervise an employee who had made an unauthorised withdrawal from the agency’s trust account.
Anthony J Hutchinson Pty Ltd, trading as Hutchinson Real Estate, was also required to pay $500 in costs after admitting that he failed to exercise due skill, care and diligence in breach of the Real Estate and Business Agents Act.
In July 2015, the trust account manager of the agency transferred $1,006.46 into her personal bank account that was supposed to be reimbursed to a client who had rented a property in Derby. The agency’s ledger reflected that the amount had been paid to the client as a refund.
The unauthorised transfer was discovered when the client enquired about the refund in March 2016. Following an internal investigation, Mr Hutchinson uncovered the unauthorised withdrawal and reimbursed the client from agency funds.
The fine also covered other breaches related to the overcharging of agreed fees to two clients involving small amounts of money and the late lodgement of security bonds with the Bond Administrator that had been received from four tenants between July and November 2016. The bonds had been lodged from eight to 71 days outside the prescribed timeframe.
The SAT stated that the overall conduct by the agent was a culmination of poor accounting and lax business practices. In determining the penalty, the SAT considered mitigating factors such as:
- Mr Hutchinson’s subsequent actions to put more stringent accounting practices in place;
- While accepting full responsibility for the actions of his business, Mr Hutchinson was as much a victim of the fraud as was the client;
- The agent ensured the money was paid back to the client so no money was lost; and
- Mr Hutchinson had voluntarily reported the matter to Consumer Protection.
Commissioner for Consumer Protection David Hillyard said licensed agents have to take ultimate responsibility for the actions of their employees.
“That’s why agents must closely supervise the activities of their staff and have checks and balances in place, particularly with the operation of the agency’s trust account,” Mr Hillyard said.
“Trust monies are held on behalf of clients, so any misconduct only serves to undermine public confidence in the real estate industry.
“This case also highlights the need for agents to ensure they lodge all tenants’ security bonds with the Bond Administrator as soon as practicable or within 14 days, as required by law.”
More information on the obligations of real estate agents, sales representatives and property managers is available on the Consumer Protection website: www.consumerprotection.wa.gov.au or enquiries can be made by email email@example.com or by calling 1300 30 40 54.
Media Contact: Alan Hynd, (08) 6552 9248 / 0429 078 791 / firstname.lastname@example.org
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