Running a Property Management Department means we are responsible for our clients’ rental funds. So of course we must have a Trust Account – and that’s a good thing.
But Trust Accounts can be subject to fraudulent operation – sadly this does happen, which is not good for clients, agencies or the industry itself. As we’ve been in the industry a long time and seen the trauma this has created in other agencies, we recognise how important it is to have good processes in place, as well as sound and efficient systems and great staff who also understand the huge responsibility we are given when we hold other people’s money. It’s our core concern, always.
We use an extremely good trust account software program – Console. This certainly provides a level of protection for the Trust Account and the Console program is central to prioritising the safety of the funds we hold. We have a number of other measures in place to make sure we are constantly monitoring and protecting our clients’ money, but also the good reputation we hold in this area.
We operate a completely cashless office, which reduces the level of risk enormously. Nothing is paid in cash – the initial deposit; bond monies; ongoing rent; or payment of other items in certain circumstances. Everything we do comes through our Trust Account, but nothing is paid in cash. This takes away the possibility of any cash that seems to be ‘missing’. It’s a concern for the industry that a number of smaller agencies, and also a few larger ones, still accept cash as a method of payment. This form of rent payment can be more easily subject to trust account fraud and a very good reason for agencies to find other ways of accepting payment. It’s also extremely inefficient and a constant drain on resources.
It’s extremely important to have strong processes and effective systems in place and ensuring that staff adhere to those processes and systems. Our processes include daily ‘audit’ checks on reconciliations; banking; bond lodgements and other items. While we are very proud of our team and their honesty and integrity, it’s still important that ongoing monitoring and checking takes place on a daily basis.
Console has the facility to allow staff limited access to bank accounts and trust account accounting software and it’s especially important that any level of access is restricted to property management staff only, not anyone else in the business except management. Console has the ability for a number of reports to be provided on a daily, weekly, or monthly basis and we use these reports regularly as part of our overall trust accounting ‘audit’
All business with a trust account are subject to external Audits, as indicated by legislation. We have just completed our annual Audit and received a great report from our external Auditor – which in turn is sent to the Business Licensing Authority. While we have never had any trust accounting issues, it’s always satisfying to see that the Auditor likes the way we carry our responsibilities and the way we attend to our Trust Accounting tasks on a daily basis.
All our new tenants must provide a bank cheque for bond monies that is made out to the R.T.B.A. and we lodge all bonds received directly to this bond board within the required time frame. This markedly reduces the level of any risk and demonstrates a very clear process of handling bond monies, which is obviously important. Businesses who accept cash for bond lodgement take a serious risk of trust account fraud and this is another very good reason why we are a cashless office.
While we have a dedicated trust account administrator, three of our property management team also have the ability to run the Trust Account and we also have a company accountant who has full knowledge of what is required when handling Trust Account funds. These measures are very important, not only to remove the possibility of fraud, but other people are able to attend to trust account items if our administrator is on annual or sick leave. Importantly, the extra people who can operate the Trust Account are both senior managers and directors within the property management department and fully capable of conducting the regular spot audits that are necessary in the industry we work in.
As with all things, it’s the few people who do the wrong thing who make it twice as hard for those who focus on doing the right thing, as well as those who provide a transparent, open working environment. But if solid processes, efficient and effective systems are in place, this goes a long way to ensuring that the operation of a Trust Account is done as it should be. We are very proud of our record and history attached to the operation of our Trust Account and it’s great to see our external Auditor also appreciates this.
If you are considering selecting a new property manager, perhaps you should ask this question when meeting with them. Who is responsible for the Trust Account in your office and have you ever had an instance of Trust Account fraud? Sometimes when considering a property manager we focus more on the regular property management tasks; management fees; rent prices; or any number of other normal items – without ever asking who is looking after your money??
If you have any question with regard to the management of Trust Accounts, please feel free to contact us on firstname.lastname@example.org