How do I deal with the PEXA fee when preparing for settlement?
Many of my clients are initially confused on how to deal with the PEXA fees when preparing for settlement - so I thought I'd post some comments here to try to assist.
The PEXA fee will automatically appear in the Financial Settlement Schedule (FSS) once documents have been created and the lodgement instructions have been edited and saved. When sending cheque directions to the Incoming Proprietor's representative, the Proprietor on Title's representative should include the PEXA fee in the same way you would include a "cheque" payable for outstanding rates or legal fees if you were settling manually. The Proprietor on Title's total due on settlement should look something like:
Unpaid Council rates
Unpaid Water rates
Bank payout (if required)
Any other relevant payment
Balance payable to the Proprietor on Title (POT)
The total of these amounts above should equal the balance due to the POT on settlement.
The Incoming Proprietor (IP) is required to provide sufficient source funds to pay the above balance due to the POT, plus the following:
Lodgement fees - paid direct to the land registry
Stamp Duty - paid direct to the State's revenue office
In it's simplest form, the IP's PEXA fee is paid from Source funds.
After settlement, the PEXA fee should be included in your Settlement Statement - in the same way you would include amounts if you obtained a Survey or Building Report.
Remember, each line item in the Destinations area of the FSS equates in the manual world as a "cheque" being drawn at settlement. In PEXA, these payments are all made electronically at settlement.