Trust accounting obligations explained: what the legislation requires (and what it doesn’t) 

Article by Kate Sunol Marketing Manager, Industry and Growth 21 January 2026

Trust accounting is one of the most regulated parts of property management, and one of the easiest areas to overcomplicate. 

Many agencies know they must comply but aren’t always clear on what the legislation actually requires versus what’s simply become standard practice over time. That uncertainty can make teams cautious about changing workflows, even when current processes are creating unnecessary friction. 

This article breaks down what Australian trust accounting legislation genuinely requires, what it leaves up to the agency and where operational risk usually comes from in practice. 

Why trust accounting legislation exists 

Trust accounting laws exist for one primary reason: to protect consumers. 

When tenants pay rent or owners’ funds are held by an agency, that money doesn’t belong to the business. Legislation is designed to ensure those funds are: 

• Kept separate from the agency’s operating money 

• Used only for their intended purpose 

• Recorded clearly and transparently 

• Able to be traced and audited if required 

In other words, the focus is on safeguards and accountability, not on prescribing how agencies must run their internal workflows. 

What trust accounting legislation requires 

While the exact wording differs between states and territories, trust accounting obligations across Australia are broadly consistent. 

At a high level, legislation requires agencies to ensure that: 

• Trust money is held in a designated trust account 

• Funds received on behalf of tenants or owners must be kept separate from the agency’s own money. 

• Transactions are recorded accurately and promptly 

• Every receipt and disbursement needs to be documented so it can be clearly followed. 

• Audit trails are maintained 

• Records must show how money moved through the trust account, including when, why and under whose authority. 

• Funds are only used for their intended purpose 

• Trust money cannot be used for unrelated expenses or transferred without proper authorisation. 

These requirements apply regardless of the size of the agency or the tools being used. 

What the legislation does not prescribe 

This is where confusion often creeps in. 

Trust accounting legislation does not usually specify: 

• The exact payment method tenants must use 

• Whether payments must be batched or processed individually 

• How quickly funds must be disbursed, beyond reasonable timeframes 

• Whether workflows must be manual or automated 

Instead, legislation focuses on outcomes, accuracy, traceability and control, rather than the mechanics of how payments are processed day to day. 

This distinction is important, particularly for agencies considering changes to their payment workflows. 

Why process consistency matters so much 

Legislation expects agencies to be able to explain and evidence what happened to trust money at any point. 

Where processes can vary from person to person: 

• Records become harder to follow 

• Errors are easier to miss 

• Audits take longer and feel more stressful 

Consistent workflows make compliance easier to demonstrate. They also reduce reliance on individual knowledge and memory, which becomes increasingly important as teams grow or change. 

How modern systems support legislative obligations 

Modern property management platforms don’t replace trust accounting rules, they’re designed to support them. 

When payments, receipting, journals and reconciliation are handled as part of a connected workflow: 

• Transactions are recorded as they occur 

• Audit trails are clearer and easier to review 

• Fewer steps rely on manual intervention 

• Visibility improves across the business 

This doesn’t remove the need for oversight or authorisation. It simply reduces the number of opportunities for inconsistency or delay. 

Traditional methods can still be compliant 

It’s also important to be clear that traditional trust accounting methods can remain fully compliant. 

Agency types that may continue to manage trust accounting manually without issue include: 

• Smaller portfolios 

• Stable, experienced teams 

• Well-documented processes 

In these cases, familiarity and discipline can be effective risk controls. 

Where challenges tend to arise is when those same processes are stretched to support larger portfolios or higher transaction volumes. 

Choosing workflows with legislation in mind 

When reviewing trust accounting workflows, the most useful question isn’t “is this allowed?” but “does this make compliance easier or harder to maintain?”. 

Workflows that support compliance can: 

• Reduce repeat handling of transactions 

• Improve visibility earlier in the process 

• Follow the same steps every time 

• Make records easier to trace and explain 

Many agencies adopt a hybrid approach, keeping traditional methods where they work well and introducing modern tools where they remove the most friction. 

The bigger picture for agency leaders 

For principals and trust account managers, trust accounting isn’t just about staying on the right side of the rules. It plays a big role in how confident owners, tenants and staff feel about the business. 

When processes are well defined and followed consistently: 

• Compliance feels under control, not overwhelming  

• Teams are clearer on what to do and when 

•  Audits become something you plan for, not something that derails operations 

This is the space platforms like PropertyMe focus on — helping agencies meet their obligations while stripping back the day-to-day admin that makes trust accounting harder than it needs to be. 

Key takeaway 

Trust accounting legislation sets the guardrails. How agencies operate within those guardrails is largely up to them. 

By understanding what the law actually requires, and what it doesn’t, agencies can make more confident decisions about their workflows, adopt improvements where they make sense and maintain compliance without adding unnecessary complexity. 

Disclaimer: The information enclosed has been provided for general information only. It should not be taken as constituting professional advice.    

PropertyMe is not a legal adviser. You should consider seeking independent or other advice to check how the information relates to your unique circumstances.