Trust account rules for Queensland motor dealers
Consignment money isn’t yours until the deal is done. Queensland’s Agents Financial Administration Act sets out how you bank it, record it, pay it out and have it audited.
- Deposit trust money before the end of the first business day after you receive it.
- Update the receipt register within 2 business days, and reconcile within 5 business days after each month ends.
- Withdraw only once the transaction is finalised, and pay the seller within 14 days of a written request or otherwise within 42 days.
- Appoint an auditor within 1 month of opening the account.
Which law applies
Trust accounts for motor dealers are governed by the Agents Financial Administration Act 2014. The Motor Dealers and Chattel Auctioneers Act 2014 also requires a principal licensee to keep a trust account, and if you sell on consignment you must have one.
Opening the account
- Only a principal agent can open a trust account.
- Notify the Office of Fair Trading within 2 months using Form 5 (no fee).
- Appoint an auditor within 1 month of opening it, and notify the Office of Fair Trading within 1 month of the appointment.
The account itself
- It must be with an approved financial institution, at an office or branch in Queensland, and the bank gets a copy of your licence first.
- The account name must include “trust account” and match the name on your licence.
- Interest on trust accounts is paid to the Queensland Government, not to you.
- Trust money can’t be used to pay your creditors, and they can’t seize it.
What is and isn’t trust money
| Trust money | Not trust money |
|---|---|
| Buyer deposits | Reimbursement of an expense you’ve already paid and hold a receipt for |
| Sale proceeds on a consignment | Your own business money |
| Money the seller pays in advance for expenses (advertising, searches, cleaning) |
Nothing else goes in the trust account. If a payment mixes trust and non-trust money and can’t be split, bank it all and draw out the non-trust part within 14 days.
The deadlines
| What | Deadline |
|---|---|
| Deposit trust money | Before the end of the first business day after you receive it |
| Update the receipt register | Within 2 business days of using a receipt |
| Reconcile the account | Within 5 business days after the end of each month |
| Pay the person entitled, after a written request | Within 14 days of the request |
| Pay the person entitled, otherwise | Within 42 days after the transaction is finalised |
Failing to deposit on time carries up to 200 penalty units or 2 years’ imprisonment. A written account to the seller follows the same 14 and 42-day timing.
A worked example: one consignment, start to finish
| Day | What happens | Deadline it triggers |
|---|---|---|
| Monday | Buyer pays a $1,000 deposit | Bank it before the end of Tuesday; update the receipt register within 2 business days of issuing the receipt |
| Thursday | Buyer pays the balance and the sale settles | The transaction is finalised: you can now withdraw |
| Following Monday | Seller emails asking to be paid | Pay them within 14 days of that request |
| If they never ask | Pay them within 42 days after Thursday’s finalisation | |
| End of the month | Reconcile the trust account within 5 business days |
The example assumes no public holidays. Business days exclude public holidays, so a holiday pushes the banking deadline out. Your commission comes out last, after the seller is paid or alongside them.
Taking money out
You can only withdraw once the transaction is finalised, meaning settled or terminated. The seller is paid before or alongside other parties, and your commission comes out last. Only a licensee can operate a trust account; registered salespeople must never operate one.
What a trust receipt must show
Complete a receipt as soon as you receive money, or on the day you learn of an electronic payment. Receipts are numbered consecutively and headed “Agents Financial Administration Act 2014 Trust Account Receipt”. Each one shows:
- Your name and licence number.
- The date received and the date the receipt was completed.
- Who completed it (and their signature, on a paper receipt).
- Who the receipt is for, and who the money is held for.
- A short description of the matter.
- The amount in figures, and how it was paid.
Cash book entries are due within 2 business days, or the same day for an electronic transfer.
The audit
Your audit covers the 12 months ending on your “audit month”, which is the eighth month after your licence was first issued. The audit report is due within 4 months after that month ends and is lodged online. Your auditor also makes two unannounced examinations each audit period.
Keeping records
Keep trust records for 5 years.
Common ways dealers get it wrong
- Leaving a Saturday deposit in the safe until the following week instead of banking it by the end of the next business day.
- Paying the seller’s share late because they “never asked”. The 42-day limit applies regardless.
- Taking commission before the seller is paid.
- Keeping commission on expenses the seller paid up front.
- Letting a salesperson operate the trust account. Only a licensee can.
- Missing the auditor appointment in the first month after opening the account.
If something goes wrong
- Dishonestly using someone else’s money is a crime carrying up to 1,000 penalty units or 5 years’ imprisonment.
- Paying out other than as the Act allows carries up to 200 penalty units or 2 years.
- Your bank must tell the Office of Fair Trading immediately if a trust account is overdrawn. Your auditor must report any irregularity they find.
- The Office of Fair Trading can freeze an account or appoint a receiver where misuse is suspected.
- If you can’t find the person entitled to money, it may be treated as unclaimed money under the Public Trustee Act.