This serves as a reminder to all those who in the coming year – or indeed at any time – may be asked to hand over cash to estate agents or conveyancers as a deposit on a property transaction. 
 
This was said by Lanice Steward, Managing Director of the Cape Peninsula estate agency, Anne Porter Knight Frank.
 
“No trust account money should ever be handed over without first asking where it will go and then demanding proof that it has been deposited,” said Steward. 
 
These days, she added, it is often easy to check on this within 24 hours because many trust accounts can be accessed not only by the depositor but also by the client.  A unique account is opened for each depositor and a simple password or account number given to them which gives them access to view but not to withdraw their funds.
 
“It is always advisable to demand this extra check, i.e. the right to see your trust account figures,” said Steward. 
 
Where agents and conveyancers have the ability actually to withdraw funds, she said, there will always be a danger that the funds will be used, possibly temporarily, to bankroll other deals.  Clients should therefore insist on at least two independent audits a year. 
 
“One of the surprises of the recent revelations is that, although the alleged misuse of trust account funds appears to have gone on for some time despite trust accounts having by law to be audited twice a year and therefore should be accurate.  It took a new EAAB authorised audit to come up with questions.  This, however, is unusual – regular audits are generally a safeguard against unauthorised action of this kind.
 
“The lesson to be learned,” said Steward, “is that the public must demand to see the agent’s Fidelity Fund Membership or Institute membership card (a body to which all serious agents should belong), proof of where the trust account is held and possibly also the right to viewing access.”