Withdrawal of Caveat and Transfer between related parties

[ereese]

Hi all,

My clients are the parents (A &B) of C.  C and A own a property as tenants in common in equal shares.  A & B have loaned C money to purchase C's half of the property which is secured by caveat.

A & B now seek to (a) withdraw the caveat and (b) A wants to transfer his half of the property to C as a gift.  Are these treated as separate transactions that must be lodged separately in PEXA, or can they still be lodged directly with the Titles Office after the transfer is processed in DOL? 

If this needs to be processed through PEXA, how do we go about paying the duty at the time of the transfer?  We don't have a trust account so would be using the PEXA source account.  Does the duty and all registration fees simply get deducted from our own office account or is it paid from the source account and we're then sent a bill? 

Thanks,

Erika

[Ames]

Hi @ereese

This transaction can still be lodged in paper as you will be lodging two instruments against the same folio of the register at the same time. The requirement in Victoria after 1 March 2018 in Victoria is a requirement to lodge transfers electronically, where there are no other instruments in the lodgement case.

If you did proceed with the transaction electronically, there would be payments required at settlement for PEXA fees and lodgement fees (and possibly your own professional fees). In order to meet those payments, funds must be deposited into the PEXA Source Account 3 days before the due date for settlement.

Some of the requirements for that process are:

1. Ensure the PEXA Source Account is available to you as a source account (it needs to be pre-registered against your profile)

2. Confirm the total amount of destination payments for your transaction

3. Create a corresponding source line item for that amount

4. The system will generate a PEXA Source Acccount Deposit Form, which contains unique deposit instructions for your matter (this cannot be re-used for future transactions/clients)

5. Your clients would use the form to arrange a transfer of funds to the PEXA Source Account

More information about using the PEXA Source Account can be found here and  here.

Please let me know if you have any follow up questions.

Ames.

[ereese]

Thanks Ames for your helpful comments.

It now transpires the clients didn't actually lodge a caveat, meaning there is only one dealing - the transfer - so we need to transact electronically.

Can someone please clarify for me how we deal with stamp duty?  Does that also need to be transferred to the PEXA source account, or would we still be issuing an invoice for duty in DOL that we provide to them separately for payment?

Kind regards,

Erika

[Ames]

Hi Erika @ereese

Stamp duty is paid to VIC SRO via the settlement. Once you have completed the Digital Duties form and you claim the PEXA transaction, a stamp duty line item will appear in the financial settlement schedule, showing the amount of duty to be paid.

That amount needs to be paid from the source funds in the settlement - in this case contributed via either a practitioner's trust account, or the PEXA Source Account.

PEXA fees and Land Registry fees also come from the source funds.

Hope this helps

Ames