Real estate agency guilty of misconduct for breaches of trust account audit regulations
3 September 2026
In a decision released on 14 August 2026 the Real Estate Agents Disciplinary Tribunal found One Up Realty Limited (the Agency) guilty of misconduct under the Real Estate Agents Act 2008 for breaches of real estate trust account audit regulations between the financial years ending 31 March 2018 through to 2024.
The Tribunal censured the Agency and ordered it to pay a fine of $18,000. The Agency’s company officer was ordered to undertake further training and education on trust accounts.
Facts
Under the Real Estate Agents (Audit) Regulations 2009 (Audit Regulations), all real estate agencies in New Zealand must ensure any money received in respect of a real estate transaction is deposited in a designated trust account, and every agency must keep trust account records in a manner that enables them to be properly audited.
On 24 August 2017, the Agency opened a Trust Account. In accordance with the Audit Regulations, the Agency was required to appoint an auditor, however it did not do so until 29 August 2023. Throughout this time, the Trust Account was operational, received funds relating to 275 transactions and was not audited at the times and in the manner prescribed by the Act and Audit Regulations. During this time REA engaged with the Agency reminding it of its trust account obligations. The Agency admitted that its conduct constituted a reckless contravention of the Act and Audit Regulations and pleaded guilty to the charge.
Reports prepared by the Agency’s auditor retrospectively for the 2018 to 2024 financial years did not identify any irregularities in the handling of trust monies.
The Tribunal decision
In its decision the Tribunal noted that “the Agency was reminded by the [Real Estate Authority] of its obligations to comply with the Audit Regulations and the Act on multiple occasions”, and outlined a series of notifications of requirements, requests for explanation, and referrals to compliance information from the Real Estate Authority to the Agency.
In determining the penalty the Tribunal concluded that the fine ordered against the Agency must be placed at the higher level of the available penalty for misconduct, and noted “[b]reaching the Audit Regulations must be regarded as serious. …However, we take into account that the Agency admitted liability and cooperated with the Authority at an early stage.”
REA Chief Executive Belinda Moffat says that this case highlights the critical importance of compliance with the trust account audit regulations by real estate agencies.
“Real estate agencies handle significant client and customer funds in relation to property transactions. Trust account obligations exist for the protection of consumers, and their funds. If trust accounts are not managed correctly, this could result in financial loss to consumers, reputational damage to the agency, and loss of trust and confidence in the industry as a whole.
Agencies need to have good systems for dealing with client and customer money. They also need sound procedures for oversight of the handling of money and trust accounts. Appointing a qualified auditor is a legal requirement under the Audit Regulations and a key part of the independent oversight required.
As the conduct regulator of the real estate profession, REA seeks to educate and assist agencies to meet their obligations in operating trust accounts. However where we identify reckless, wilful or ongoing non-compliance REA will take stronger regulatory action.
The Tribunal’s decision reminds agencies that failure to comply with the provisions of the Audit Regulations in relation to trust accounts is a serious breach with potentially significant consequences including consumer harm. Agencies’ systems and practices must be fully compliant and company officers are responsible and accountable for ensuring that they remain so.”
Ends
Full Real Estate Agents Disciplinary Tribunal decision:
2026-NZREADT-40-Complaints-Assessment-Committee-2302-v-One-Up-Realty-Ltd-14-August-2026.pdf