Trust Account Certificates FAQs
Who must complete the certificates?
All law firms or sole practitioners must submit certificates monthly and quarterly, unless they have no trust account and hold an exemption under s317 (1) Lawyers and Conveyancers Act 2006. (See below about practising without a trust account.)
What must go on the monthly certificates?
Five questions require 'Yes' or 'No' answers and, in the case of 'No' answers, a brief explanation.
What should I do if I forget my password?
If you forget your password, contact us by email or phone to let us know. We will email the password to the email address we have registered for the Trust Account Supervisor. You may need to file a paper certificate for the current month if you changed your password during the month.
I am not expert with trust accounts. How do I know that my trust account is in order before certifying?
We suggest you check the following before signing:
1. The trust ledger was correctly reconciled with the corresponding trust bank accounts for both the general trust account and interest bearing deposit accounts
(a) Trust ledger total properly reconciled to bank statement?
(b) Scrutinise trust bank reconciliation statement.
(c) Enquire what any unusual items are.
(d) Ask that bank deposits and other certified lists received be agreed to the trust ledger.
2. The trust account records were a complete and accurate record of transactions during the month and of each client's position
(a) Posting of trust ledger up to date?
(b) No unknown entries in month?
(c) Trust ledger in balance?
(d) Ask - have any errors been identified in the month?
(e) If so, why did they happen and how have they been corrected?
(f) Have invoices actually been issued in respect of all amounts debited as fees?
3. Trust account transactions during the month have been in accordance with client instructions and where completed, properly accounted for to clients
(a) Have all journal entries been signed as authorised?
(b) Have any payments been processed that you think might not be authorised?
(c) Have statements been sent to clients where appropriate? (Rule 5(8))
4. During the month the practice has complied with the LCA (Trust Account) Regulations 2008
(a) Are you aware of any breaches of the Regulations during the month? If so, have they since been remedied, and have you checked the possibility of other like breaches?
5. During the month the practice has complied with the LCA (Lawyers: Nominee Company) Rules 2008, where applicable
(a) This applies to all nominee company and contributory advances, but not "single lender" advances.
(b) Are mortgage records up to date and balanced?
(c) Have specific authorities been obtained for all new advances?
(d) Have investors been notified of any defaults? (Rule 13.1)
The firm float in the trust account was overdrawn for one day due to a staff error. How should I report this?
You should report this in the form of a "No" answer under item 4 on the monthly certificate, with a very brief explanation - no separate letter is necessary.
The bank failed to credit the funds for settlement on a transaction as had been arranged. As a result the trust account was overdrawn/the firm float was overdrawn for a few days. Must I report this?
If the overdraw was due to a bank error and has since been remedied, the trust account itself can be regarded as still being in order and you should enter a "Yes" under item 4. However it may still be appropriate to seek a written explanation from the bank and keep it on your file.
I don't actually want to operate a trust account as my area of practice never needs one. What can I do?
You can certify to NZLS in the form prescribed under Regulation 4, that you do not handle trust money or client assets, invest money for any client, have a trust bank account, or receive fees or disbursements in advance of an invoice being issued. You will be required to certify that you have not done any of those things during the preceding 12 months and do not intend to do any of them in the following 12 months. You will be required to renew this certificate each year.
When is the deadline?
The certificate must normally be sent by the 10th working day of each month in respect of the preceding month. In January the deadline is the 15th working day, for filing December's certificate. These dates apply for both monthly and quarterly certificates.
What happens if my certificate is late?
You will be reminded shortly after the due date. However you (or your staff) should make a diary note every month if there is any risk of it being forgotten. Persistently late certificates are an obvious sign of an inefficient office, are recorded as such in the NZLS database and notified to Inspectors and district law societies.
Can I always use the Internet for certificates when the certificates go online?
Not quite. You must submit a paper-based certificate if you are filing:
- for the first time, or
- after the monthly deadline. (The system shuts down following the deadline date specified in Rule 17 and reopens on the first of the following month), or
- a certificate for an earlier month or quarter.
How can I be sure my certificate will be safely received and recorded?
The Internet certificate system will acknowledge your certificates within minutes. For paper certificates we prefer you fax us on (04) 463 2984 and hold the transmission record on your file.
If you have no fax, use DX SP20202 or PO Box 5041, Lambton Quay, Wellington 6145 and keep a record of the date sent. Please do not double up on faxed certificates by sending another in the post or DX.
I am the TAS and going on leave - who can sign for me?
Regulation 16(4)(c) permits another partner to verify the correctness of the certificate and sign. If you are a sole practitioner, your attorney (appointed pursuant to s 44 and Schedule 1 of the LCA) can sign on your behalf, however s/he will not have your electronic password, so they should use a paper certificate.