• PEXA Myth Busting

    2019-05-16

    PEXA Myth Busting

    MYTH
    Law firms do not require authorisation from the developer to act on their behalf.

    FACT
    Developers who outsource conveyancing are required to sign a Client Authorisation form with their representative firm.
    A Client Authorisation form is a document that enables a practitioner to act on behalf of their client. While acting on behalf of the client under a Client Authorisation, the conveyancer or lawyer can:

    • Sign registry documents;
    • Present registry instruments or documents for lodgement with the Land Registry; and
    • Authorise or complete any associated financial aspects of the transaction.
    The Client Authorisation form must remain on file (either electronically or otherwise) throughout the lifecycle of your matter.  Learn more.

    MYTH
    The PEXA platform cannot notify you when settlement is complete.

    FACT
    PEXA can send notifications to developers and real estate agents upon successful settlement. Your law firm can use this functionality by simply adding one or multiple e-mail addresses into the transaction’s Workspace.
    This allows you to be notified by e-mail when a property has settled and therefore commence handing over keys to your customer.

    MYTH 
    Developers are responsible for the payment of GST.

    FACT
    Since 1 July 2018, when dealing with new residential premises or potential residential land, purchasers are required to pay the GST on the purchase price directly to the Australian Taxation Office (ATO). Previously, developers were responsible for this payment.
    PEXA provides a simple method for completing this task, offering greater efficiency and visibility around GST. Learn more.

    MYTH

    With PEXA, you must wait for funds to appear on your statement before you hand over the keys to your customer.

    FACT

    In Victoria, the majority of all property transactions are completed online using PEXA. This means that settlement occurs, and keys can be handed over to customers when the PEXA Workspace* records the status ‘settled’.

    Disbursement of funds happens after the transaction has settled, and in most instances, takes less than 30 minutes to complete once settlement has occurred. 

    Importantly, you don’t need to wait for funds to clear to consider the settlement finalised. 

    The reason for this is that once a property transfer reaches a status of ‘settled’ on PEXA, the purchaser’s funds have been moved to the receiving bank at RBA (Reserve Bank of Australia) level. The receiving bank holds the funds on behalf of the vendor and attends to disbursement after settlement.

    This is equivalent to a paper settlement when a cheque is handed over and is later deposited into the vendor’s account. The depositing occurs after settlement. In both paper and electronic settlements, keys can be released to a purchaser after confirmation of settlement.

    Additionally, PEXA can send notifications to developers and estate agents upon successful settlement. Your law firm can use this functionality, allowing you to be notified by e-mail when a property has settled and therefore commence handing over keys to your customer.

    *Shared online area in PEXA where the participants can communicate and prepare documents for a property transaction.

    Visit the PEXA site here.