on 28-06-2018 02:00 PM
In regards to your article Emily -
When a signer authorises a source financial line item, a Trust Account Authorisation Record is created. You will have the ability to access the Trust Account Authorisation before and after settlement as documentary evidence of the transaction performed for the relevant trust account source line item. This document records approval provided by the signer(s) for the debit of the amount of funds specified in the source line item from your trust account into your financial institution’s nominated internal account for the purposes of the property transaction.
For our trust records, our understanding is that we must ensure ensure that money is designated to the right person.
So when we create a source line item, our understanding is that it is to match a destination.
We know it basically it works like the below:
But our intent on our trust account records is that we pay $1000 to Conveyancer "A". Conveyancer "A" might have had $1000 in their destination line item before and we were happy with that so we signed off everything.
However, Conveyancer "A" diddled the figures a little after we signed and thus now they get $900 and different destination line item is $100 more but ultimately - Sources still matches Destinations so we are not alert to any changes.
As far as our trust account is concerned, we paid $1000 to Conveyancer A but thats not true, $1000 came out still, but $100 was sent to somewhere different.
I guess what i am asking is - for our trust account records, on our source line items must we stipulate that $1000 went towards "settlement" or to a certain "participant".
This involves PEXA because it possibly changes how we add source line items on workspaces.
on 28-06-2018 03:51 PM
Your sources do not correspond to the destinations as such.
There are a few transfers occuring. First, the movement of source funds to an internal clearing account of your bank. This is the transaction reported in your trust records (and evidenced in the Trust Account Authorisation Record).
Next, there is an interbank transfer at RBA level for all of the funds involved in the Workspace (not a 1:1 scenario).
Finally, there are disbursement payments made to the end recipients. Those disbursements are made from the banks holding value for those recipients, not by you and not from your trust account.
Your approval is to move the funds to your bank's internal account and so the recipient is your bank. The payment is typically made for the benefit of the Vendor (who can direct payments as required) and in order to effect the settlement.
on 29-06-2018 12:23 PM
Putting it simply - does this pretty much sum it up? Ours Sources go to a clearing account and then to the RBA, then from there they are disbursed out of a money pot to the destinations depending on what details were put in by the different participants.
on 29-06-2018 03:23 PM
I think it would be better to say first your sources are mingled with all other sources, so that they become a pool of funds. They are no longer identifiable as your sources.
Then the source pool becomes the destination pool, then that pool is distributed to the end recipients.
Because of the pooling, if there are two sources of funds (trust and loan proceeds), and ten destination line items, you couldn't say which of the destination accounts received your specific source funds.