Property Services Compensation Fund
Many people are not aware that there is a compensation fund that was set up by NSW fair Trading to protect consumers who have suffered a financial loss due to the actions of an agent failing to account for trust money. The Property Services Compensation Fund was set up to assist people who are out of pocket because an agent (or conveyancer) has failed to account for money or other valuable property held in trust.
A ‘failure to account’ is a reference to a failure by a licensee to account for money or other valuable property entrusted to the licensee (or an associate of the licensee) in the course of the carrying on of the licensee’s business as a licensee. The Commissioner for Fair Trading maintains the Compensation Fund.
Examples of loss may include:
- a claim by a landlord or a tenant caused by the failure of a licensee to lodge a rental bond with the Rental Bond Board
- claim by a landlord caused by a licensee’s failure to account for rent paid by a tenant
- a claim by a vendor of real estate caused by a licensee’s failure to account for the deposit paid by the purchaser on exchange of contracts
A person who has suffered a loss because of such a ‘failure to account’ may be entitled to make a claim on the Fund. The maximum amount that a Claimant may recover from the Compensation Fund is currently $500,000. Claims must be made in writing to the Director–General:
- within 12 months of becoming aware of the failure to account, or
- within 2 years of the date the failure to account took place, whichever period ends first.
You can locate claim forms here: