Audit Compliance Guidelines

Trust Accounts & Related Audit Requirements

Trust Money

Trust money refers to money entrusted to a property practitioner in his or her capacity as a property practitioner, money collected or received by a property practitioner and payable in respect of or on account of any act referred to in the definition of a property practitioner and any other money, including insurance premiums, collected or received by a property practitioner and payable in respect of any immovable property, business undertaking or contract for the building or erection of any improvements on immovable property.

Trust money does not, under any circumstances, form part of the assets of the business property practitioner. If the business property practitioner is a natural person and has died or has become insolvent, the trust money does not form part of the practitioner’s deceased or insolvent estate, respectively.

No trust money loses its nature or characteristics as a result of it being deposited, whether erroneously or not, into any account other than a section 54(1) or 54(2) trust account, and under no circumstances will such money become part of any such account.

Trust Accounts

Every business property practitioner, without a trust account exemption letter, must open and keep one or more separate trust accounts with a registered bank, which must contain a reference to section 54(1) of the Act, and all trust money held or received by or on behalf of that practitioner must immediately be deposited into that trust account.

A business property practitioner may invest in a separate savings or other interest-bearing account opened by him, her or it with any bank any monies deposited in his, her or its trust account which are not immediately required for any particular purpose, provided that such savings or other interest-bearing accounts must contain a reference to section 54(2) of the Act.

A business property practitioner must immediately notify the PPRA of any trust account opened in terms of either section 54(1) of 54(2) of the Act by emailing a bank letter confirming the opening of such trust account to bankletters@theppra.org.za. 

All trust money deposited in a section 54(1) trust account or invested in a section 54(2) trust accounts must be retained in that trust account by the business property practitioner until the practitioner is lawfully entitled to such money or is lawfully instructed in writing to make payment therefrom to any person.

Banks that have trust accounts opened in terms of section 54(1) and 54(2) on their database must submit a list of such trust account to the PPRA by 31 May of every year, indicating the trust account details, the interest earned on such trust accounts and the balances on such trust accounts as required by section 54(4) of the Act.

Trust Accounting Records

Every business property practitioner, without a trust account exemption letter, must keep accounting records, separate from business accounting records, of all monies deposited in the section 54(1) trust account and of all monies invested in the section 54(2) trust account. The business property practitioner must balance these trust accounting records on a monthly basis. 

All business property practitioners, without a trust account exemption letter, must keep the trust accounting records that are necessary to fairly reflect and explain the state of affairs of all movements in trust monies and the relevant supporting documentation for a period of five years at an address in South Africa.

Every business property practitioner, without a trust account exemption letter, must administer the trust accounts using a digital or manual bookkeeping system.

Such a bookkeeping system must at a minimum:
enable the property practitioner to record all pertinent information regarding trust accounts and the movements of all trust monies, and must include general and subsidiary ledgers, cash books, and all other documents and books of entry necessary for the proper maintenance of trust accounts,
include safeguards to protect the records thereon against unauthorised access, alteration, destruction or manipulation, and
be kept in a format that will render it readily retrievable should the Authority, an auditor or any other person entitled to the records on the bookkeeping system require to access them or make extracts or copies thereof.

Audit of Trust Accounting Records

The trust accounting records must be audited by the business property practitioner’s appointed auditor, who must be registered with the Independent Regulatory Board for Auditors as assurance, on an annual basis within 6 months of the practitioner’s financial year-end and the auditor must also submit the trust account audit report on the PPRA’s Auditors Portal within the 6-month period. Submissions of trust account audit reports after the 6-month period will result on the imposition late submission penalties on the practitioner for 3 months and a fine if the audit report remain outstanding after 9 months of the practitioner’s financial year end.

Winding up of Trust Accounts

IF
PPRA refuses under the provisions of the Act to issue a Fidelity Fund certificate to any business property practitioner who applied for a Fidelity Fund certificate,
A Fidelity Fund certificate issued to any property practitioner has been withdrawn or lapsed without being renewed,
Any business property practitioner ceases to act as such, 
Any business property practitioner intends to apply to be exempted from holding a trust account, or
Any business property practitioner becomes subject to any disqualification contemplated in section 50 of the Act,
The business property practitioner concerned must immediately wind up the section 54(1) and/or 54(2) trust accounts by:
paying out the trust money to such persons entitled to it,
close the trust account
have the winding up process audited by the practitioner’s auditor; and
have the auditor submit the winding up audit report to the PPRA on the Auditors Portal.
If a property practitioner, who has not been exempted from holding a trust account,
commits an act of insolvency,
is insolvent, or
is placed under liquidation, whether provisional or final
no monies shall be withdrawn from or paid out of the trust account(s) without the PPRA’s written consent, and the property practitioner concerned must:
forthwith notify the Authority in writing thereof,
as soon as may be practicable in writing notify the bank with which he keeps the trust accounts that in future no monies may be withdrawn from or paid out of any such account without the consent in writing of the PPRA, provided that the PPRA itself may at any time so notify such bank,
as soon as may be practicable in writing furnish the PPRA with the names of the persons entitled to any monies in the trust account(s), the amount to which any such person is entitled and the reasons thereof;
having complied with the above requirements and with the consent in writing of the Authority, pay to the entitled persons and to such other persons who in the opinion of the Authority are entitled to any monies in such accounts, the monies to which they are entitled,
If no person has proved any claim to the balance in the trust account, pay such balance to the Property Practitioners Fidelity Fund, and
After all the monies in the trust accounts have been paid in terms of this process, close the trust accounts and in writing notify the Authority thereof.

Unclaimed or Unidentifiable Trust Money

Any business property practitioner,
who winds up a trust account which contains unclaimed or unidentifiable money, or
who has held monies the trust account in which the owner or beneficiary could for longer than three years are not identified,
be kept in a format that will render it readily retrievable should the Authority, an auditor or any other person entitled to the records on the bookkeeping system require to access them or make extracts or copies thereof.

must pay that money into the Property Practitioners Fidelity Fund to be held in trust, but the Property Practitioners Fidelity Fund must, upon application in the prescribed manner by the owner or beneficiary of such money and with the provision of sufficient proof, pay that money to that owner or beneficiary.

Any unclaimed or unidentifiable trust money paid into the Property Practitioners Fidelity Fund which has remained unclaimed by the person entitled thereto for a period of 30 years as from the date upon which such person became entitled to claim that money, is forfeited to the Fidelity Fund.

Interest Earned on Trust Accounts

Property practitioners must not solicit or influence any person entitled to trust funds under their control to make over or pay to the property practitioner directly or indirectly any interest on moneys deposited or invested in terms of section 54 (1) or 54 (2) of the Act. Before a property practitioner receives any trust money in trust in respect of a contract of sale or lease, the practitioner must disclose to the parties concerned that unless they agree in writing to whom interest earned on such money must be paid, 50% of such interest shall accrue to the Property Practitioners Fidelity Fund and the property practitioner shall retain the remaining 50%.

Document Downloads

Practitioner Search
Practitioner Search

Verification Details

×
Scroll to Top