For agency principals and sales teams | 5 minute read

An agency that directs a buyer’s deposit to a third party needs to know more than where the money will be held. It needs to know whether the arrangement meets its trust account obligations, how the buyer is protected, what happens to its anti-money laundering responsibilities and whether any benefit to the agency must be disclosed.

The industry has taken to calling the practice ‘deposit flicking’. Typically, the buyer pays an entity that holds the deposit until settlement instead of paying it into the agency’s statutory trust account. The description may sound simple, but changing who receives and holds the money can change the protections and obligations around a transaction.

If a provider proposes such an arrangement, ask for its terms in writing and work through four questions before giving anyone payment instructions.

1. What does your trust account legislation require?

Trust account rules are set by states and territories, so the answer depends on where your agency operates and precisely how the payment is made.

In New South Wales, money received by a licensee on behalf of another person in the course of the licensee’s business is subject to the Act’s trust money requirements. Queensland’s legislation also sets requirements for trust money received by an agent, including when it must be paid into a trust account.

The first issue for your solicitor is whether the agency receives the deposit, or is treated as receiving it, under the proposed arrangement. If the buyer pays a third party directly, the legal analysis may be different. That distinction needs to be established from the contract, payment process and applicable law; it cannot be settled by calling the third party a ‘stakeholder’.

Ask who has been appointed to hold the deposit, under what authority, and whether the arrangement complies with the rules in every jurisdiction where you intend to use it. A provider’s general assurance is no substitute for advice on your agency’s own obligations.

2. How is the buyer’s money protected?

An agency trust account operates under statutory requirements for handling and recording money. A third-party arrangement may operate under different rules. Buyers and vendors should understand that difference before money moves.

Find out whose name is on the account, who can authorise a withdrawal and when the deposit can be released. Ask what happens if settlement is delayed, the contract is disputed or the holder becomes insolvent. Obtain a clear answer on whether any statutory compensation or fidelity protection applies to the particular arrangement. Do not assume that protections associated with an agency trust account automatically follow money held elsewhere.

The contract and payment instructions should identify the holder accurately and make the release conditions clear. Your team also needs a reliable way to verify account details independently before a buyer transfers a substantial sum. Any change to payment instructions deserves particular care.

3. Do your AML/CTF obligations change?

Australia’s expanded anti-money laundering and counter-terrorism financing regime began applying to businesses that provide covered real estate services on 1 July 2026. AUSTRAC explains that an agency’s obligations depend on the designated services it provides.

Those obligations do not necessarily disappear because another business holds the deposit. A third party may perform tasks under an arrangement, but the agency must establish what remains its responsibility when it provides a designated service.

Ask the provider to specify, in writing, which tasks it will perform, what information it will give your agency and which obligations it claims the arrangement changes. Have your AML/CTF adviser assess that explanation against your agency’s services and program. Moving a payment is not, by itself, an answer to the compliance question.

4. Does your agency receive a benefit?

Ask whether the arrangement brings your agency a fee, referral payment, rebate, share of interest, discount or other benefit. Include indirect benefits and payments to related parties in that review.

A financial benefit may create disclosure or conflict of interest issues in addition to any trust account question. The precise rules vary by jurisdiction. For example, NSW guidance on agents’ rules of conduct addresses benefits that could give rise to a conflict of interest.

Document what, if anything, the agency receives. Have your solicitor advise whether the arrangement is permitted and what must be disclosed to the vendor or buyer. If there is no benefit, record that too.

Make the arrangement clear before asking for payment

A buyer should be told who will hold the deposit and should receive payment instructions consistent with the contract. A written clause can help establish what the parties agreed, but agreement alone cannot override a statutory requirement. Your solicitor needs to check both the contract terms and the agency’s legal obligations.

Before adopting a third-party arrangement, put the following on one file:

  • The provider agreement and the legal identity of the deposit holder.
  • The proposed contract clause and buyer payment instructions.
  • Details of the account, withdrawal authority and release conditions.
  • Written advice on trust money requirements in each relevant jurisdiction.
  • An assessment of buyer protections and your continuing AML/CTF obligations.
  • Details of any agency benefit and advice on required disclosures.

The practical decision for a principal is whether the agency can explain and support every step, from the buyer’s payment through to settlement. Get independent legal and compliance advice on the proposed arrangement before directing the first deposit.