The former president of the Real Estate Institute of Australia is facing a potential fine, and his wife possible jail time, over trust accounting breaches in their real estate practice.

Malcolm Gunning was president of Australian real estate's top body until late last year, months after copping an official reprimand from Fair Trading NSW in February 2018 for "breaches of the act" relating to alleged failures to properly monitor his company's property management trust fund.

Mr Gunning is now being prosecuted by Fair Trading in the Parramatta Local Court for allegedly breaching the rules of conduct that apply to licenced real estate agents.

Mr Gunning's wife, Alice Gaye Gunning, faces more serious charges, including breaching the rules of conduct applying to agents, failing to have trust records audited and trust account fraud.

The Gunnings' company, Guncom Pty Ltd, was fined $3,300 by Fair Trading.

It has also been charged with failing to have trust account records audited, failing to keep a trust account in the correct licensee name and failing to comply with requirements related to receipts for trust money.

In December, an application was lodged with ASIC to wind up Guncom.

However, Mr Gunning told the ABC that both he and his wife would be "vigorously defending" the court proceedings.

Mr Gunning acknowledged that a deficit of as much as $288,000 had appeared in the property management trust fund, but that the money was returned.

"The public haven't been disadvantaged here," he said.

Mr Gunning also said that the problems resulted in significant changes to how the business was run.

"The whole property management staff were completely replaced," he said.

Mr Gunning faces a potential fine of about $5,000 if convicted, and his case returns to court for a mention on March 7.

The next mention for Mrs Gunning's case is on March 21.