Linked Settlements are used when proceeds from one Settlement are to be used as Source Funds for another Settlement.
Two or more dependent Settlments. Surplus (Vendor) funds from Settlement A are used as Source (Purchasers) Funds for Settlement B.
Vendor 1 has sold Property 1 to Buyer 1. Vendor 1 has bought Property 2 from Vendor 2. Vendor 1 is wanting to use surplus funds from the sale of Property 1 as source funds in the transaction for the purchase of Property 2.
Two separate PEXA Workspaces are required.
Workspace 1 – Transfer of Land from Vendor 1 to Buyer 1.
Workspace 2 – Transfer of Land from Vendor 2 to Vendor 1.
Although the Workspaces are unrelated from a Land Registry perspective, the two Workspaces are related from a Financial Perspective. Surplus funds owing to Vendor 1 from Workspace 1 will be used as Source funds in Workspace 2 for purchase from Vendor 2.
PEXA will manage the orchestration of the two Workspaces as follows:
Each individual Workspace in a Linked Settlement must successfully complete Lodgement Verification prior to commencement of Settlement Execution.
The Financial Settlement Schedule in each Workspace must be balanced and signed. Source line items from Trust Accounts must be Verified and (if required) Authorised.
A preceding Workspace may not commence execution of Settlement until the trailing Workspace is ready and locked for Settlement.
Vendor Surplus funds from the preceding Workspace are used as Source funds in the trailing Workspace.
At execution the PEXA linked Settlements model:
Preserves the synchronised exchange of funds for title for each individual Workspace in the chain. Funds for Workspace 1 are exchanged following Lodgement of the Transfer of Land. Similarly, funds for Workspace 2 are exchanged following Lodgement of the Transfer of Land.
It follows that if Lodgement fails for a preceding Workspace and financial settlement rolls-back, then the trailing workspace will not commence Settlement execution and will fail settlement.
It follows that if Lodgement fails for a trailing Workspace, following successful settlement and lodgement of a preceding Workspace, the preceding Workspace will not roll-back. The successful lodgement of Workspace 1 cannot be ‘un-lodged’.
Currently, the PEXA linked Settlements model is limited to a chain length of three Workspaces.