Trust account mismanagement is the most common cause of real estate licence cancellation in Australia. Monthly reconciliation is a legal requirement in every state — and failure to reconcile, or to keep adequate reconciliation records, is treated as a serious breach even when no actual shortfall exists. This guide explains what a compliant real estate trust account reconciliation looks like, what records you must keep, and how to ensure your trust account is always audit-ready.
State Reconciliation Requirements
While every Australian state requires monthly reconciliation, the deadline varies:
| State | Frequency | Deadline | Regulator |
|---|---|---|---|
| NSW | Monthly | Within 5 days of month end | NSW Fair Trading |
| VIC | Monthly | Within 14 days of month end | Consumer Affairs Victoria |
| QLD | Monthly | Within 10 days of month end | Office of Fair Trading QLD |
| WA | Monthly | Within 21 days of month end | Consumer Protection WA |
| SA | Monthly | Within 14 days of month end | CBS South Australia |
What a Compliant Reconciliation Includes
A trust account reconciliation must confirm that three balances agree with each other as at the end of the reconciliation period:
Bank balance
The closing balance on the trust account bank statement for the period — not the running balance in your PM software, but the actual bank statement figure.
Trust ledger balance
The sum of all individual trust ledger balances — one ledger per client, per matter. This is the amount held in trust per your own records for each client.
Cash book balance
The running total in your trust cash book (or PM software trust ledger), reflecting all receipts and disbursements during the period.
All three must agree. If they don't, the difference must be identified, documented, and resolved before the reconciliation is considered complete. An unexplained difference is a trust account shortfall — a serious breach that, in most states, must be reported to the regulator immediately.
Records You Must Retain
- The signed, dated reconciliation statement for each month — showing the three balances and confirming they agree (or documenting any identified difference)
- The bank statement for the trust account for the relevant period
- The trust ledger balances per client as at the reconciliation date
- Records of all receipts and disbursements during the period
- The annual audit report from your approved auditor
Most states require trust account records to be retained for 5–7 years. NSW requires 3 years minimum; however, best practice is 7 years given the potential for a late audit or dispute.
Common Reconciliation Errors
- Reconciliation performed late — the deadline is strict; late reconciliation is a breach even if the balances agree
- Using the PM software balance rather than the bank statement — these can differ due to timing of uncleared transactions
- Disbursements made before funds clear — paying out before the deposit clears creates a temporary shortfall
- Unauthorised withdrawals — any disbursement not authorised by the client or under the agency agreement is a trust account breach
- Failing to keep the reconciliation record — the reconciliation was performed but the documentation was not retained
Keep trust account records audit-ready with REA Hub
REA Hub stores your monthly reconciliation records, audit reports, and trust account registers in one structured, searchable place — with automated reminders before your state's reconciliation deadline.
Learn about trust accounting features →This guide is for general information only. Trust accounting requirements vary by state. Always verify current requirements with your state regulator or a qualified accountant.