CPPREP4125 Transact in Trust Accounts – Short Answer Questions

ASSESSMENT TASK 2 – Short Answer Questions

Please review the questions below and answer in 200 words / 1-2 paragraphs or less (unless advised otherwise).

1

1. What are the types of real estate trust account a real estate would use?
2. Explain the purpose of real estate trust accounts.

2. Explain how trust account receipts are issued for trust money received by way of cheque, credit card or electronic funds transfer (EFT).

3. Who should you make the receipt out to and what must be included on the receipt if the person paying the deposit money is different to the person named on the contract for sale?

4. Explain your responsibility, as an agent, if a cheque deposited into a trust account is dishonoured by the bank.

5.

1. Explain when withdrawals from trust accounts are permitted.
2. What are the only permitted methods to draw trust money from an licensee’s trust account?

6. Identify two (2) requirements to be included on a cheque for a withdrawal from a licensee’s trust account?

7. Explain why it is important for the licensee in charge of an agency to provide staff with clear guidelines for management of trust accounts, including privacy and security of information from clients.

8. Regarding unclaimed trust money:

1. What is considered unclaimed trust money?
2. Identify and explain the process for dealing with unclaimed trust money 

9. Once a payment advice has been received authorising payment and the payment has been made, how should the payment advice be stored?

10. When/how often is it recommended that the trust account cash book be reconciled?

11. When/how often is it recommended that the trust account cash book be reconciled?

12. Looking at the property legislation for your state or territory, advise the maximum penalty for non-compliance in the following areas. Assume penalties are for individuals.

1. Not completing required trust account reconciliations each month
2. Penalty points: _20__
3. Calculated penalty is $_3698.40__
4. Receipts for trust money not including all required information
5. Penalty units: _10__
6. Calculated penalty is $__1894.20_