Client funds in auction transactions must be handled with care, transparency and accountability. A trust account helps ensure deposits and proceeds are kept separate from business money, reducing confusion, improving record keeping, and protecting buyers and sellers if disputes arise.

Trust accounts are one of the most important safeguards in many auction transactions. A trust account is a separate bank account used to hold money on behalf of others, commonly buyer deposits, settlement funds or proceeds owed to vendors. The purpose is simple: client money should be kept separate from the auction business’s everyday operating funds and handled according to clear, accountable processes.

In auctions, money can move quickly. Deposits may be taken immediately at the fall of the hammer. Funds may be held temporarily while documentation is completed. Vendors may rely on sale proceeds to meet their own commitments. When these financial flows are not managed properly, clients can face stress, confusion or disputes. Trust accounts reduce those risks by creating separation, transparency and control.

From a client’s perspective, trust accounts demonstrate that an auction business understands it has responsibilities beyond the sale itself. Handling client money is a serious obligation. When trust money is managed properly, it builds confidence for both vendors and buyers and supports smoother settlements and fewer misunderstandings.

In Australia’s auction industry, trust accounts important for consumers because they:

• Keep client funds separate from business operating money, reducing the risk of accidental mixing or inappropriate use.
• Support accurate record keeping, including receipts, payment tracking and reconciliation.
• Provide stronger protection if disputes arise, because there is a documented pathway for handling money fairly.
• Enable auditing and independent oversight, strengthening accountability and financial discipline.

The Auctioneer and Valuers Association of Australia (AVAA) membership criteria requires that individual AVAA Certified Auctioneers and auction businesses use trust accounts.  When a AVAA Certified Auctioneer receives money on behalf of another person or business, a trust account is required. Sole traders must maintain a trust account and provide independent auditor certification to demonstrate appropriate financial accountability. Where an auctioneer is employed by a non-corporate member, the employer must also maintain a trust account and provide similar certification.

For clients, these requirements create reassurance that deposits and proceeds are handled through structured systems rather than informal arrangements. They also encourage better internal controls, such as proper authorisation for withdrawals, consistent receipting and regular reconciliation.

Clients should feel comfortable asking their auctioneer: Where will my deposit be held? Will I receive a receipt immediately? When will the vendor be paid? What happens if the sale does not proceed? Clear answers, supported by written terms and professional processes, are a hallmark of a well-run auction business.

In a polite but practical sense, dealing with an auctioneer who cannot clearly explain how deposits and proceeds are managed may increase the risk of delayed payments, uncertainty or disputes. Trust accounts help reduce these risks and support confidence in the auction process.

Ultimately, trust accounts protect vendors, protect buyers and protect the integrity of the auction transaction. When money is handled properly and transparently, everyone involved can focus on the sale itself, confident that the financial safeguards are in place.

So, looking to engage an auctioneer?

Be sure to ask whether they are an AVAA Certified Auctioneer or that the business is an AVAA corporate member.  This means that they will use trust accounts to hold your money thus providing you with an increased level of confidence.