What Is Deposit Flicking, and Should Your Agency Be Doing It?
Deposit flicking is the industry's nickname for a practice that has spread quickly this year: an agency directs a purchaser's deposit to a third party entity, which holds it until settlement, instead of the deposit going into the agency's own statutory trust account.
Whether your agency should be doing it is not really one question. It is four. What does your trust account legislation actually require. What happens to your buyer's protection. Do your anti-money laundering obligations really move. And is there a benefit flowing to your agency that you have not disclosed.
If you have been approached about one of these arrangements, work through those four before you sign anything.
Where the Term Came From
You will not find deposit flicking in any Act, and no regulator uses it. It is a critic's label, coined by the conveyancing side of the industry in the middle of 2026 to describe something the providers describe far more neutrally as third party stakeholding.
That matters for two reasons. First, the name tells you the debate is already heated. Second, the substance is what counts, not the label. Strip the nickname away and the question is simple: is somebody other than your agency holding money your buyer has paid, and does the law let that happen?
Why It Appeared When It Did
This is not a coincidence of timing. On 1 July 2026, the second tranche of Australia's anti money laundering and counter terrorism financing regime commenced for real estate. Agencies became reporting entities, with customer due diligence, source of funds and beneficial ownership obligations attached to the transactions they handle.
That is a genuine and unfamiliar compliance load, and a market appeared to meet it. The pitch is straightforward and, on its face, appealing: let a third party hold the deposit as stakeholder, and the anti-money laundering obligations that attach to holding client money sit with them instead of you.
Less work, less risk, someone else's problem. It is easy to see why a busy principal would listen.
The trouble is that the pitch answers one obligation by creating questions about several others.
Question One: What Your Trust Account Legislation Requires
Start here, because everything else is secondary.
Every state and territory says roughly the same thing. Money you receive in your capacity as an agent, on behalf of somebody else, must be paid into your agency's statutory trust account, and it must be paid in fast. In New South Wales the obligation sits in the Property and Stock Agents Act 2002. In Queensland the Agents Financial Administration Act 2014 requires the amount to be paid into the general trust account before the end of the first business day after you receive it, and separately requires money in a trust account to stay there until it is paid out the way the Act permits. Victoria has its equivalent in the Estate Agents Act 1980.
These are not administrative rules. In Queensland the maximum penalty attached to those provisions runs to 200 penalty units or two years imprisonment.
So the first question is not whether a third party arrangement is convenient. It is whether the deposit is money you have received in the course of your agency. If it is, your legislation has already told you where it goes.
We have set out the full picture of what those obligations look like day to day in a real estate agency's trust account obligations.
Question Two: What Happens to Your Buyer's Protection
Statutory trust accounts are not just a filing requirement. They sit inside a protective structure: audit, regulator oversight, and in each state a compensation or fidelity fund that can respond if money held in trust goes missing through fraud or defalcation.
Money held somewhere else may sit outside that structure entirely.
That is worth sitting with for a moment, because the person carrying that risk is not you. It is the buyer who handed over their deposit believing it was protected the way deposits have always been protected. If you are the agent who directed the money there, you are the one who will be asked why.
Question Three: Does the AML Obligation Actually Move
This is the part of the pitch to press hardest, because it is the whole rationale.
Your anti-money laundering obligations attach to you because of what your agency does, not only because of which bank account the money passes through. Industry reporting on these arrangements has included warnings that agents remain covered by their own obligations regardless of who holds the deposit.
Before you accept that the burden transfers, ask the provider to show you, in writing, exactly which of your obligations they say are extinguished and on what basis. Then have that answer checked. An arrangement that removes a compliance task but leaves the underlying obligation in place has not saved you anything. It has added a party.
Our earlier piece on AML and privacy compliance for real estate agencies sets out what those obligations actually involve.
Question Four: Is There a Benefit, and Have You Disclosed It
Ask a plainer question too. Does your agency receive anything for directing deposits to this entity? A fee, a rebate, a share of interest, a discount on another service, a referral arrangement.
If the answer is yes, you have moved from a compliance question to a disclosure question. You act for your vendor. Benefits received in connection with a transaction attract disclosure obligations under the agents legislation in every state, and a benefit your client does not know about is a very difficult thing to defend later.
If the answer is no, get that in writing too, because it is the answer you will want on file.
Consent Is Not a Cure All, But Silence Is Fatal
Some of these arrangements are documented with an express clause in the contract, where the buyer agrees the deposit will be held by the named entity. Others rely on nothing more than the buyer following the payment instructions they were given.
The difference between those two is enormous, and the second one is indefensible. A buyer who was simply told where to send money, and who assumed it was going to the agency's trust account, has not consented to anything.
But do not read that the other way either. A consent clause does not override a statutory obligation about where trust money must be held. Consent goes to whether your buyer was misled. It does not go to whether your licence obligations were met. You need both answers, not one.
There is a practical trap here as well. Any arrangement that trains buyers to send large sums to an account that is not the agency's own trust account makes payment redirection fraud easier, not harder. That is a risk with a very long tail.
Picture an agency that adopted one of these arrangements in July, on the basis that it lifted an anti-money laundering burden. Nobody at the agency had read the state trust account provisions, the contract said nothing about the arrangement, and buyers were simply given payment instructions. Three months in, one buyer asked a conveyancer why the deposit had not gone to the agency's trust account. The question the principal could not answer was not a difficult legal one. It was: who decided this, and what did we check first?
Now picture the same agency taking a different path. The principal asks for the arrangement in writing, has it reviewed, discovers where it sits against the trust account provisions in every state the agency operates in, and asks the vendor's consent to anything that involves a benefit. That review costs a fraction of one deposit. It also means that when a buyer, a conveyancer or a regulator asks the question, there is an answer on file.
Where the Debate Is Up To
Two things are worth knowing, and both point the same way.
The practice is being contested publicly and in court, which means the legal position is being tested rather than settled. And NSW Fair Trading has said it is consulting industry stakeholders to assess whether current buyer safeguards, agents' compliance with their legal obligations and the existing regulatory settings are adequate.
A regulator reviewing whether the settings are adequate is not a reason to panic. It is a reason not to be the test case. The agencies that come out of this well will be the ones who asked the questions before they signed, not the ones who wait to find out. The same pattern played out with privacy, where privacy audits have started well before most agencies were ready. If a query does land on your desk, what to do if you receive a letter from Fair Trading sets out how to handle it.
If You Are Approached, Ask for These
The arrangement in writing, including who holds the money, in what type of account, and under what authority
A written statement of which of your obligations the provider says are affected, and on what legal basis
Confirmation of whether your buyer's money is covered by any compensation or fidelity fund while it is held
The exact contract wording the buyer is being asked to agree to
Full detail of any fee, rebate, commission, interest or other benefit flowing to your agency
Confirmation of how the arrangement works in every state you operate in, because trust account rules are state law
Then have all of it reviewed before a single deposit moves.
Handling other people's money is the oldest obligation in agency practice, and the one regulators take most seriously. A new compliance burden is a reason to get good advice. It is not a reason to move the money somewhere new and hope. Getting that review done sits under compliance and licensing, alongside the rest of real estate agency law.
Key Takeaways
Deposit flicking is the industry's nickname for an agency directing a purchaser's deposit to a third party entity that holds it until settlement, rather than the agency's own statutory trust account. It is not a legal term and no regulator uses it.
The practice spread after the second tranche of Australia's anti-money laundering regime commenced for real estate on 1 July 2026, making agencies reporting entities.
Start with your trust account legislation. Every state requires money received in the course of your agency to be paid into your statutory trust account, and quickly.
Money held outside a statutory trust account may sit outside the compensation or fidelity fund your buyer is relying on.
Anti-money laundering obligations attach to what your agency does, not only to which account the money passes through. Ask the provider to state in writing which obligations they say are extinguished, and have that checked.
If your agency receives any fee, rebate, interest or other benefit for directing deposits, that is a disclosure question with your vendor, not just a compliance question.
An express consent clause is far better than payment instructions alone, but consent does not override a statutory obligation about where trust money must be held.
The position is being contested in court and NSW Fair Trading has said it is consulting on whether current safeguards and regulatory settings are adequate. Get advice before you sign, rather than becoming the test case.
Next Steps
1. If you already use a third party deposit arrangement, pull the documents together today: the agreement, the contract wording your buyers see, and any fee or rebate arrangement.
2. Check the arrangement against the trust account provisions in every state your agency operates in, not just your home state.
3. Confirm in writing whether your buyer's money is covered by a compensation or fidelity fund while the third party holds it.
4. Ask the provider, in writing, exactly which of your anti money laundering obligations they say are affected and why.
5. Disclose any benefit to your vendor, and put the disclosure on file.
If you have been approached but have not signed, do all of the above before you do.
Been offered a third party deposit arrangement, or already using one?
Book a free 10 min call with a member of our team.
Frequently Asked Questions (FAQ)
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It is the industry's informal name for an arrangement where a real estate agency directs or transfers a purchaser's deposit to a separate third party entity, which holds the money until settlement, instead of the deposit being paid into the agency's own statutory trust account. It is not a term used in legislation or by any regulator.
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In each state and territory, money an agent receives on behalf of someone else must generally be paid into the agency's statutory trust account, within a short deadline. In Queensland, for example, it must be receipted before the end of the first business day after received, and must stay there until paid out as the Act permits.
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That is exactly what is being tested. The starting point is your state's trust account legislation, which tells you where money received in the course of your agency must go. The position is currently being contested publicly and in court, and NSW Fair Trading has said it is consulting on whether existing safeguards and regulatory settings are adequate. Get advice on your specific arrangement rather than relying on a general answer.
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Do not assume so. Anti-money laundering obligations attach to your agency because of the services it provides, not only because of which account money passes through, and industry reporting has included warnings that agents remain covered regardless of who holds the deposit. Ask the provider to state in writing which obligations they say are extinguished, and have that checked.
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Not necessarily. Statutory trust accounts sit inside a protective structure of audit, regulator oversight and a state compensation or fidelity fund. Money held outside a statutory trust account may fall outside that protection, and the person carrying that risk is the buyer.
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Get the arrangement in writing, including who holds the money and under what authority, what the buyer is being asked to agree to, whether any compensation fund covers it, which of your obligations the provider says are affected, and any fee or benefit flowing to your agency. Then have it reviewed against the trust account rules in every state you operate in, before any deposit moves.
Luke Shumack – Principal, Realgate Legal
Luke Shumack is one of the Principals at Realgate Legal with a Bachelor of Laws and a sharp focus on helping agencies and business owners stay compliant while scaling with confidence. Since starting his legal career in 2021, Luke has worked closely with real estate agencies, startups, and established businesses on privacy compliance, employment law, contractor agreements, mergers and acquisitions, and corporate governance. Known for his tech savvy approach and love of efficiency, Luke blends legal precision with practical business strategy, making the complex simple for clients who want to move fast without risk.
Boring legal stuff: This article is general information only and cannot be regarded as legal, financial or accounting advice as it does not take into account your personal circumstances. For tailored advice, please contact us. PS - congratulations if you have read this far, you must love legal disclaimers or are a sucker for punishment.