Conveyancers (Professional Conduct and Trust Account and General) Regulations 2008

Version No. 003

Conveyancers (Professional Conduct and Trust Account and General) Regulations 2008

S.R. No. 49/2008

Version incorporating amendments as at 12 October 2010

table of provisions

RegulationPage

Part 1—Preliminary

1Objectives

2Authorising provisions

3Commencement

4Definitions

Part 2—Rules of Professional Conduct

5Rules of professional conduct

Part 3—Trust Accounts

Division 1—Introduction

6Authorised employee

Division 2—Computerised accounting system

7Application of Division

8Chronological record of information to be made

9Requirements regarding computerised accounting system

10Back-ups

Division 3—General trust accounts

11Establishment and maintenance of general trust account

12Receipting of trust money

13Deposit records for trust money

14Payment by cheque

15Payment by electronic funds transfer

16Recording transactions in trust account cash books

17Trust account receipts cash book

18Trust account payments cash book

19Recording transactions in trust ledger accounts

20Journal transfers

21Reconciliation of trust records

22Trust ledger account in name of conveyancing business or licensee

Division 4—Controlled money

23Requirements for controlled money accounts

24Maintenance of controlled money accounts

25Receipt of controlled money

26Withdrawal of controlled money must be authorised

27Register of controlled money

Division 5—Transit money

28Information to be recorded about transit money

Division 6—Trust money generally

29Trust account statements

30Trust account statements for institutional clients

31Withdrawing trust money for costs

32Duration for keeping of trust records

Division 7—Miscellaneous

33Exemption

Part 4—General

34Statutory declaration on ceasing to hold trust money

35Claims against the Fund

36Disallowance of a claim against the Fund

37Embargo notice

38Infringement offences and infringement penalties

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SCHEDULES

SCHEDULE 1—Rules of Professional Conduct

1Honesty, fairness and professionalism

2Skill, care and diligence

3Fiduciary obligations

4To only undertake work within competence

5To perform work promptly

6To act in the client's best interests and according to the client's instructions

7To regularly communicate with client

8To confirm client's oral instructions in writing

9Conflicts of interest

10Acting for more than one party to a transaction

11Confidentiality

12Noting of instructions, enquiries and telephone conversations

13Referral to service provider

14Soliciting through false or misleading advertisements or communications

15Termination of licensee's services

16Transfer of conveyancing work

17Transfer of conveyancing business

18Conducting another business

19Independence of licensee advising on loan or security
documents

20Advising proposed signatories on loan or security documents

SCHEDULE 2

Form 1—Statutory Declaration on ceasing to hold Trust Money

Form 2—Notice of disallowance of claim for compensation from
the Victorian Property Fund

Form 3—Embargo Notice

SCHEDULE 3—Infringement Offences and Infringement Penalties

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ENDNOTES

1. General Information

2. Table of Amendments

3. Explanatory Details

Version No. 003

Conveyancers (Professional Conduct and Trust Account and General) Regulations 2008

S.R. No. 49/2008

Version incorporating amendments as at 12 October 2010

Conveyancers (Professional Conduct and Trust Account and General) Regulations 2008

S.R. No. 49/2008

Part 1—Preliminary

1Objectives

The objectives of these Regulations are to prescribe—

(a)the rules of professional conduct for conveyancers; and

(b)procedures for the keeping of general trust accounts and trust ledger accounts, controlled money accounts, transit money and other trust records; and

(c)general matters.

2Authorising provisions

These Regulations are made under section 188 of the Conveyancers Act 2006.

3Commencement

These Regulations come into operation onthe day on which section 188 of the Conveyancers Act 2006 comes intooperation.

4Definitions

In these Regulations—

authorised employee of a licensee means an employee authorised by the licensee under regulation 6;

r. 4

BSB number (Bank State Branch number) means the number assigned to identify a particular branch of a particular ADI;

direct deposit means a deposit made by transferring money directly from one account into another without the use of a cheque or cash;

law practice has the same meaning as in the Legal Profession Act 2004;

matter description means a brief phrase or expression assigned by a conveyancing business to describe a matter;

matter reference means a number or other reference assigned by a conveyancing business to identify a matter;

the Act means the Conveyancers Act 2006.

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Part 2—Rules of Professional Conduct

5Rules of professional conduct

r. 5

The rules set out in Schedule 1 are prescribed for the purposes of section 45 of the Act as rules of conduct to be observed by a licensee in the course of the conduct of a conveyancing business or the performance of functions under a licence.

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Part 3—Trust Accounts

Division 1—Introduction

6Authorised employee

r. 6

(1)A licensee, by instrument, may authorise an employee of the licensee to be an authorised employee for the purposes of these Regulations.

(2)The instrument in subregulation (1) must be signed by the licensee and the employee.

Division 2—Computerised accounting system

7Application of Division

This Division applies where a licensee keeps trust records (including records relating to controlled money) by means of a computerised accounting system.

8Chronological record of information to be made

The licensee must keep a recordin permanent form, compiled in chronological sequence, of the creation, amendment or deletion of information in the computerised accounting system in relation to the following—

(a)client name;

(b)client address;

(c)matter reference;

(d)matter description;

(e)ledger account number—

disclosing the details before and after the creation, amendment or deletion of the information.

9Requirements regarding computerised accounting system

r. 9

(1)The licensee must ensure that the computerised accounting system is not capable of accepting the entry of a transaction resulting in a debit balance to a trust ledger account, unless a contemporaneous record of the transaction is made in a manner that enables the production, in permanent form, of a separate chronological report of all occurrences of that kind.

(2)The licensee must ensure that the system is not capable of deleting a trust ledger account unless—

(a)the balance of the account is zero and all outstanding cheques have been presented; and

(b)when the account is deleted, a copy of the account is retained in a permanent form.

(3)The licensee must ensure that any entry in a record produced in a permanent form appears in chronological sequence.

(4)The licensee must ensure that each page of each printed record (where necessary) is numbered sequentially.

(5)The licensee must ensure that the system is not capable of amending the particulars of a transaction already recorded otherwise than by a transaction separately recorded that makes the amendment.

(6)The licensee must ensure that the system requires input in every field of a data entry screen intended to receive information required by this Part to be included in trust records.

10Back-ups

r. 10

The licensee must ensure that—

(a)a back-up copy of all records required by this Part is made not less frequently than once each month; and

(b)each back-up copy is retained by the licensee; and

(c)a complete set of back-up copies is kept in a separate location so that any incident that may adversely affect the records would not also affect the back-up copy.

Division 3—General trust accounts

11Establishment and maintenance of general trust account

(1)This regulation applies for the purposes of section66(2) of the Act.

(2)A general trust account satisfies the requirements of this regulation if—

(a)the account is established in Victoria with an approved ADI assoon as practicable after trust money to which section 66(1) of the Actapplies is received by the licensee; and

(b)the account is maintained in Victoria; and

(c)the name of the account includes—

(i)the name of the licensee; and

(ii)the expression "conveyancing business trust account" or "conveyancing business trust a/c".

(3)Subregulation (2)(c) does not apply to an account established in Victoria before the commencement of this regulation.

(4)Subregulation (2)(c)(ii) does not require the repetition of the words "conveyancing business" if those words form part of the name of the licensee.

12Receipting of trust money

r. 12

(1)This regulation applies if a licensee receives trust money that is required to be paid into a general trust account.

(2)After receiving the trust money, the licensee must make out a receipt.

(3)The receipt must be made out as soon as practicable—

(a)after the trust money is received; or

(b)in the case of trust money received by direct deposit—after the licensee receives or gains access to a notice or confirmation (in written or electronic form) of the deposit from the ADI concerned.

(4)The receipt, containing the required particulars, must be made out in duplicate, whether by way of making a carbon copy or otherwise, unless at the time the receipt is made out those particulars are recorded electronically in the trust account receipts cash book.

(5)For the purposes of subregulation (4), the required particulars are as follows—

(a)the date the receipt is made out and, if different, the date the money was received;

(b)the receipt number;

(c)the amount of money received;

(d)the form in which the money was received;

(e)the name of the person from whom the money was received;

(f)details clearly identifying the name of the client in respect of whom the money was received and the matter description and matter reference;

(g)particulars sufficient to identify the purpose for which the money was received;

(h)the name of the licensee's conveyancing business, or the business name under which the licensee performs conveyancing work, and the expression "trust account" or "trusta/c";

(i)the name of the person who made out the receipt.

(6)The original receipt is to be delivered, on request, to the person from whom the trust money was received.

(7)Receipts must be consecutively numbered and issued in consecutive sequence.

(8)If a receipt is cancelled or not delivered, the original receipt must be retained.

13Deposit records for trust money

r. 13

(1)This regulation applies if a licensee receives trust money that is required to be paid into a general trust account and the money is not paid into a general trust account by direct deposit.

(2)A deposit record,containing the required particulars, must be produced to the approved ADI at the time the deposit is made.

(3)The deposit record, containing the required particulars, must be made out in duplicate, whether by way of making a carbon copy or otherwise, unless at the time the deposit is made out those particulars are recorded electronically in the trust account deposits book.

(4)The duplicate deposit record must be kept for each deposit to the general trust account and must be kept in a deposit book or be otherwise securely filed in the order in which the deposits were made.

(5)For the purposes of subregulations (2) and (3) the required particulars are as follows—

(a)the date of the deposit;

(b)the amount of the deposit;

(c)whether the deposit consists of cheques, notes or coins (and the amount of each);

(d)for each cheque—

(i)the name of the drawer of the cheque;

(ii)the name and branch (or BSB number) of the ADI on which the cheque is drawn;

(iii)the amount of the cheque.

14Payment by cheque

r. 14

(1)This regulation applies to the withdrawal of trust money from a general trust account by cheque.

(2)A cheque—

(a)must be made payable to or to the order of a specified person or persons and not to bearer or cash; and

(b)must be crossed "not negotiable"; and

(c)must include—

r. 14

(i)the name of the licensee's conveyancing business; and

(ii)the expression "conveyancing business" or "conveyancing business trust a/c".

(3)A cheque must be signed—

(a)by the licensee; or

(b)if the licensee is not available, by an authorised employee of the licensee.

(4)A paper copy record of the required particulars (which may be in the form of a cheque butt) must be kept of each payment made by cheque, whether by way of making a carbon copy or otherwise, unless at the time the cheque is issued those particulars are recorded electronically in the trust account payments cash book.

(5)For the purposes of subregulation (4), the required particulars are as follows—

(a)the date and number of the cheque;

(b)the amount ordered to be paid by the cheque;

(c)the name of the person to whom the payment is to be made or, in the case of a cheque made payable to an ADI, the name or BSB of the ADI and the name of the person receiving the benefit of the payment;

(d)details clearly identifying the name of the person on whose behalf the payment was made and the matter reference;

(e)details clearly identifying the ledger account to be debited;

(f)particulars sufficient to identify the purpose for which the payment was made.

(6)Records relating to payments by cheque (including cheque requisitions) must be kept in the order in which the cheques were issued.

(7)Subregulation (2)(c) does not apply to an account established in Victoria before the commencement of this regulation.

(8)Subregulation (2)(c)(ii) does not require the repetition of the words "conveyancing business" if those words form part of the name or business name of the licensee's conveyancing business.

15Payment by electronic funds transfer

r. 15

(1)This regulation applies to the withdrawal of trust money from a general trust account by electronic funds transfer.

(2)An electronic funds transfer must be under the direction of or with the authority of—

(a)the licensee; or

(b)if the licensee is not available, by an authorised employee of the licensee.

(3)A paper record of the required particulars must be kept of each payment, unless at the time the electronic funds transfer is effected those particulars are recorded by computer program in the trust account payments cash book.

(4)For the purposes of subregulation (3), the required particulars are as follows—

(a)the date and number of the transaction;

(b)the amount transferred;

(c)the name and number of the account to which the amount was transferred and relevant BSB number;

(d)the name of the person to whom the payment was made or, in the case of a payment to an ADI, the name or BSB number of the ADI and the name of the person receiving the benefit of the payment;

(e)details clearly identifying the name of the person on whose behalf the payment was made and the matter reference;

(f)details clearly identifying the ledger account to be debited;

(g)particulars sufficient to identify the purpose for which the payment was made.

(5)Records relating to payments by electronic funds transfer (including transfer requisitions) must be kept in the order in which the transfers were effected.

16Recording transactions in trust account cash books

r. 16

A licensee who maintains a general trust account must keep the following trust account cash books—

(a)a trust account receipts cash book in accordance with regulation 17; and

(b)a trust account payments cash book in accordance with regulation 18.

17Trust account receipts cash book

(1)The following particulars must be recorded in a licensee's trust account receipts cash book in respect of each receipt of trust money—

(a)the date the receipt is made out and, if different, the date the money was received;

(b)the receipt number;

(c)the amount of money received;

(d)the form in which the money was received;

(e)the name of the person from whom the money was received;

(f)details clearly identifying the name of the client in respect of whom the money was received and the matter description and matter reference;

(g)particulars sufficient to identify the purpose for which the money was received;

Reg. 17(1)(h) substitutedby S.R.No. 46/2010reg.5(a).

(h)details clearly identifying the ledger account to be credited.

Reg. 17(1)(i) revokedby S.R.No. 46/2010reg.5(b).

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(2)The date and amount of each deposit in the general trust account must be recorded in the trust account receipts cash book.

(3)The particulars in respect of receipts must be recorded in the order in which the receipts are made out.

(4)The particulars in respect of a receipt must be recorded within 5 business days from and including the day the receipt was made out.

18Trust account payments cash book

r. 18

(1)The following particulars must be recorded in a licensee's trust account payments cash book in respect of each payment of trust money by cheque—

(a)the date and number of the cheque;

(b)the amount ordered to be paid by the cheque;

r. 18

(d)details clearly identifying the name of the person on whose behalf the payment was made and the matter reference;

(e)details clearly identifying the ledger account to be debited;

(f)particulars sufficient to identify the purpose for which the payment was made.

(2)The following particulars must be recorded in a licensee's trust accounts payments cash book in respect of each payment of trust money by electronic funds transfer—

(a)the date and number of the transaction;

(b)the amount transferred;

(c)the name and number of the account to which the amount was transferred and relevant BSB number;

(d)the name of the person to whom the payment was made or, in the case of a payment to an ADI, the name or BSB number of the ADI and the name of the person receiving the benefit of the payment;

(e)details clearly identifying the name of the person on whose behalf the payment was made and the matter reference;

(f)details clearly identifying the ledger account to be debited;

(g)particulars sufficient to identify the purpose for which the payment was made.

(3)The particulars in respect of payments must be recorded in the order in which the payments are made.

(4)The particulars in respect of a payment must be recorded within 5 business days from and including the day the payment was made.

19Recording transactions in trust ledger accounts

r. 19

(1)A licensee who keeps a general trust account must keep a separate trust ledger account in relation to each client in each matter for which trust money has been received by the licensee.

(2)The following particulars must be recorded in the title of a trust ledger account—

(a)the name of the person for or on behalf of whom the trust money was paid;

(b)the person's address;

(c)particulars sufficient to identify the matter in relation to which the trust money was received.

(3)Details of any changes in the title of a trust ledger account must be recorded.

(4)Transactions relating to trust money must be recorded in the trust ledger account in the order in which the transactions occur.

(5)The following particulars must be recorded in the trust ledger account in respect of each receipt of trust money for the matter—

(a)the date a receipt was made out for the money or, if different, the date the money was received;

(b)the amount of money received;

(c)the name of the person from whom the money was received;

(d)particulars sufficient to identify the purpose for which the money was received.

(6)The following particulars must be recorded in the trust ledger account in respect of each payment of trust money by cheque—