Property glossary
Trust account
Also known as: trust banking account, section 54 trust account
A separate bank account a property practitioner must keep for clients' money, ring-fenced from the firm's own funds and audited annually.
Definition
A trust account is a dedicated bank account in which a managing agent or rental agency holds money that belongs to clients — rent, deposits, levies and the like — entirely separate from the firm's own operating funds. Money in trust may only be paid out to or on behalf of the person entitled to it, and the account must be reconciled regularly. Trust money never forms part of the firm's assets and cannot be used to fund the business.
In the South African context
Under the Property Practitioners Act 22 of 2019, a property practitioner who handles trust money must open and keep a trust account with a bank and may only operate once registered and holding a valid Fidelity Fund Certificate. Trust accounts must be audited annually and the audit report submitted to the Property Practitioners Regulatory Authority (PPRA). The Act's predecessor protections (formerly under the Estate Agency Affairs Act) carried over, and the Estate Agents/Property Practitioners Fidelity Fund underwrites client losses from theft of trust money.
Example
A managing agent collecting R150 000 in monthly rent across its portfolio banks all of it into the firm's trust account, then disburses each landlord's share less commission — the agent's own commission only moves to the business account once it is due and earned.
Why it matters
Correct trust accounting is a legal precondition to operating as a property practitioner; a shortfall or commingling can cost the firm its Fidelity Fund Certificate and expose the principal to criminal liability.
Informational only — not legal advice. Confirm specifics against the current Act and your scheme’s rules.
Sources
- Property Practitioners Act 22 of 2019 — Trust account, Fidelity Fund Certificate and annual audit requirements for property practitioners