Hi Community,
We've received some queries about responsibility for the discharge of lodgement fee in WA so we've put together a summary of the options in PEXA.
PEXA collects Lodgement Fees on behalf of the land registry, which are automatically included as a disbursement in the Financial Settlement Schedule. Whilst the “Responsible Subscriber” will receive the invoice for the Lodgement Fee, the Lodgement Fee is paid out of the total pool of source funds. This will represent a change to the current process for payment of Lodgement Fees for some practitioners.
In most paper settlements in Western Australia, the Vendor’s Bank supplies a cheque for the lodgement fee for lodgement of the Discharge of Mortgage. In a PEXA settlement, the Vendor retains responsibility for the fee, either by creating a source line item, or accepting less surplus, which is effectively a direction to pay part of the Vendor’s entitlement to the Land Registry.
In both South Australia and Western Australia, practitioners will need to utilise one of the below approaches in order to account for the payment of the Discharge of Mortgage Lodgement Fee from source funds. It’s important not to do both! Otherwise the Vendor will be double paying the fee.
- The Proprietor on Title or Mortgagee on Title can add a Source Line Item to cover the Lodgement Fee for the Discharge of Mortgage; or
- When calculating the adjustments and payment directions, the amount of the discharge of mortgage fee will need to be a credit from the vendor to the purchaser on the adjustment statement.
It is also best practice for both the incoming (purchaser’s) and outgoing (vendor’s) practitioner to outline in the conversations to their client’s respective bank how the lodgement fee has been/needs to be dealt with in the Workspace.
Over time, industry may adopt a nationally consistent approach and include the discharge of mortgage fee in the adjustment statement as a credit from the vendor to the purchaser.
We have included a WA sample of the Statement of Adjustments below, where the Discharge of Mortgage fee has been adjusted for your reference.
Cheers, from Amy, @AngellaC, @FionaR, @DeborahP
