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Safeguard for trust account deposits
In a major win for the industry, agents can now more easily safeguard their trust account deposits in the event that their bank or financial institution collapses.
Last October, Prime Minister Kevin Rudd pledged to guarantee deposits up to $1 million for the next three years in a bid to bolster public confidence in the banking system during the global economic crisis.
However agents may not have realised that deposits over $1 million – which includes most trust accounts – are not automatically guaranteed by the Federal Government and, until now, seeking a guarantee could incur substantial fees.
Following lobbying by the Real Estate Institute of Australia (REIA), the Federal Government has agreed to waive the fees charged to banks and financial institutions to guarantee deposits over $1 million.
These fees were previously being passed on to customers by some banks and financial institutions. The REIA has heard from agents who have been hit by fees worth thousands of dollars after applying to guarantee their trust account deposits.
REIA’s lobbying victory should now make it easier for agents to apply to their bank or financial institution to seek a guarantee for their trust account, at no cost. Ultimately this will also benefit consumers by ensuring better protection of their funds.
Unfortunately the Federal Government has only agreed to waive the fee from April 1 onwards and will not reimburse fees incurred prior to this date. However REIA understands that these fees should be tax deductible.
REINSW urges agents to check with their bank or financial institution to ensure that their trust account deposits are backed by the Federal Government guarantee. |
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