Trust account abuse sees settlement agent pay $150,000

A former West Australian settlement agent, who surrendered her licence in September 2010, has had to pay more than $150,000 in fines and compensation after unauthorised withdrawals from a trust account, as ordered by the Joondalup Magistrates Court.

Renee Lee Matthews, who had traded as Saachi Settlements of Ocean Reef, was fined $9,000 after pleading guilty to five charges of breaching the Settlement Agents Act. She then was ordered to pay a total of $129,422 to the Fidelity Guarantee Account, $11,889 in court costs and $923 to a former client.

Matthews failed to pay stamp duty to the Office of State Revenue on five properties in Clarkson, Pearsall, Port Kennedy, Bassendean and Butler, said Consumer Protection. These settlements occurred between February and April 2010.

Investigation into Matthews’ trust account found that she had used a portion of the stamp duty payments to pay off previous Office of State Revenue debt, with the majority of the funds transferred out of the trust account.

This is in breach of the Settlement Agents Act that orders money to only be withdrawn with the purpose of completing a settlement or by written consent of the parties involved.

The Fidelity Guarantee Account, operated by Consumer Protection, had paid the outstanding debt to the OSR for former clients of Matthews. The compensation fund is created of revenue from licence fees and interest from trust accounts.

Commissioner for Consumer Protection Anne Driscoll said that there are strict procedures in place around the transfer of funds for property transactions in the state, designed to protect consumers.

“Agents must adhere strictly to these laws as there are serious consequences for any breaches, and may result in the settlement of properties being delayed at great expense and inconvenience to both buyers and sellers,” said Driscoll.

The penalty was handed down by Magistrate Edward De Vries, who noted that this betrayal of trust brings the entire profession into disrepute, however also noted that Matthews had difficult personal circumstances when the offences took place.

Matthews was operating a mobile business with an address listed at 5 Era Cove, Ocean Reef, where she independently owned and operated Saachi. The property is owned by Kerry Ann Matthews and Wayne Matthews.

This article first appeared on Property Observer.

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