Legal Action Threatens Nicheliving Over Trust Account Management
Legal action has been initiated against the deregistered Perth builder Nicheliving, now operating as Australian Property Alliance, by the WA Commissioner for Consumer Protection. The allegations center around improper management of customer funds from a trust account. It is claimed that $50,000 was transferred to a builder just a day after a contract was executed, raising concerns regarding trust account regulations.
Allegations of Mismanagement
The accusations state that Nicheliving improperly released funds to a builder before it was legally permissible. Trish Blake, the WA Commissioner for Consumer Protection, is advocating for disciplinary action on behalf of affected customers, particularly in a strata development context.
Nature of the Complaint
Blake outlined the requirements for builders engaging in off-the-plan sales. Deposits are meant to remain in trust accounts until the relevant strata plans are registered. This practice protects consumers by ensuring that their funds are safeguarded should a development fall through.
- Date of Allegation: The fund transfer occurred the day after the contract signing.
- Amount Transferred: $50,000 was moved to the builder prematurely.
- Legal Obligations: Funds must remain in trust until strata plan registration.
According to Blake, the breach of trust stemmed from unauthorised withdrawals and a failure to uphold the standards expected of real estate agents, including honesty and diligence. Although the affected consumer has since been reimbursed, the Consumer Protection Agency is treating these allegations with utmost seriousness.
Significance of Trust Accounts
Trust accounts are critical in maintaining consumer confidence in the building industry. Blake emphasized that consumers investing in properties rely heavily on the developer’s integrity. Any violations of trust undermine this essential relationship.
Broader Issues with Nicheliving
Despite deregistration, issues surrounding Nicheliving persist. In November 2022, ASIC and the AFP conducted raids on properties associated with company directors Ronnie Michel-Elhaj and Paul Bitdorf, seizing electronic devices. An ongoing investigation into their operations is under review.
Faced with numerous complaints about unfinished or defective homes, Nicheliving struck a deal with the WA government in 2024. They agreed to surrender their building license for a decade, allowing customers to access indemnity insurance payments up to $200,000.
Future Proceedings
The State Administrative Tribunal will address the allegations surrounding trust account mismanagement on March 10. Possible outcomes include a reprimand or the suspension of licenses. The outcomes could significantly impact the future of both Nicheliving and its leadership.
Conclusion
The unfolding case against Nicheliving and its current operations as Australian Property Alliance raises critical questions about regulatory compliance within the building industry. Ongoing investigations aim to ensure that consumer protection remains a priority.
