We've prepared this information to address some common queries about the treatment of fees in relation to PEXA transactions. Specifically:
(i) South Australian lodgement fees being collected by PEXA, not Revnet;
(ii) Reconciliation and adjustment of the Discharge of Mortgage lodgement fee, particularly in South Australia and Western Australia;
(iii) How South Australian practitioners may now account to their purchaser clients in relation to lodgement fees;
(iv) The different treatment of PEXA fees for Financial Institutions (direct debit) and Representative Subscribers representing Financial Institutions (line items).
Refer to PEXA’s Pricing Schedule for more details.
- 1. collection of pexa and lodgement fees
- The Land Registry Lodgement Fee is collected by PEXA as agent for the relevant Land Registry.
If the PEXA transaction does not involve a Financial Settlement (such as a Caveat or Priority Notice), both the PEXA and Lodgement Fees are direct debited by PEXA from the Subscriber's nominated account (or the Panel Master’s account where the functionality described in section 9 "Bill to instructions" is applied) following successful lodgement of the Lodgement Case.
If a PEXA Transaction involves a Financial Settlement (such as a Transfer), PEXA Fees for Representative Subscribers and Lodgement Fees for all Subscribers are automatically included as destinations in the Financial Settlement Schedule, which means they will be paid at settlement. As the PEXA and Lodgement Fees are paid at the time of settlement, they cannot be charged to the client as disbursements. Charging the PEXA and Lodgement Fees to the client will result in a duplication of payment.
Some practitioners disclose the PEXA fee to clients as an amount payable by that client. Others agree to bear the PEXA fee or contribute to it (split it with the client). In practice, this is achieved by reducing the amount of professional fees by the amount (or portion) of the PEXA fee.
While Lodgement Fees for all documents in the Workspace are included as a single destination line item, PEXA Fees for Financial Institutions will continue to be direct debited, even where there is a Financial Settlement. For illustration, refer to Table 1 in section 4 "Payment of Lodgement Fee in a Transfer". - 2. Supply of invoices
- Lodgement Fees
PEXA will supply a Subscriber with an invoice for the relevant Land Registry Lodgement Fees on the evening of the Business Day of the successful completion of the relevant Conveyancing Transaction as follows:- For a Conveyancing Transaction involving multiple parties – to the Responsible Subscriber in respect of the Conveyancing Transaction; and
- For a Conveyancing Transaction involving a single Subscriber – to that Subscriber (unless the functionality described in section 9 is applied, in which case the invoice will be provided to the Panel Master where the Panel Master is to be billed for the Charges).
In a Conveyancing Transaction involving multiple parties (such as a Transfer) the Responsible Subscriber is typically the Incoming Mortgagee (or if there is no Incoming Mortgagee, the Incoming Proprietor). It is important that Subscribers edit and view the Lodgement Instructions to ensure the correct Responsible Subscriber has been selected. Only one Responsible Subscriber can be selected per Lodgement Case.
PEXA Fees
PEXA will supply each Subscriber with an invoice for the relevant PEXA Fee on the evening of the Business Day of the relevant Lodgement and / or Financial Settlement. If the functionality described in section 9 "Bill to instructions" is applied, the invoice will be supplied to the Panel Master where the Panel Master is to be billed for the Charges. - 3. payment of pexa fee in a transfer
- A PEXA Fee is payable by each Subscriber, depending on their role in the Workspace. In a Transfer Workspace, the PEXA Fee is payable by both the Incoming Proprietor and Proprietor on Title and is automatically included as destination line items in the Financial Settlement Schedule, which means they will be paid at settlement.
To avoid the Incoming Proprietor paying both PEXA Fees from source funds, the vendor’s surplus should be reduced by the amount of the vendor’s PEXA Fee.
For the Incoming Proprietor, the PEXA Fee can simply be added to the total pool of source funds required to settle.
Refer to PEXA’s Pricing Schedule for more details.
- 4. payment of lodgement fee in a transfer
- As discussed above, PEXA will collect the Lodgement Fee which is 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.
The below table shows how the PEXA Fee is paid and receipt of invoices in a Transfer Workspace.
Note: Lodgement Fees are always included as a single destination line item in the Financial Settlement Schedule.
Representative Subscribers: Unless the Representative Subscriber has made other arrangements with PEXA, the PEXA Fee will be collected at settlement.
*If the loan contract allows the PEXA Fee to be passed on to the customer, the customer will be charged. If the loan contract does not allow the PEXA Fee to be passed onto the customer, the financial institution will absorb the fee.
^ Where the mortgagee is represented by a Representative Subscriber, the PEXA Fee will be included as a destination line item in the Financial Settlement Schedule and will be taken into account when calculating the total amount of source funds. - 5. reconciliation by financial institutions
- In a paper settlement in Western Australia, the Vendor supplies a cheque for the 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. As discussed in section 2, the Responsible Subscriber will receive an invoice for the total amount of Land Registry fees.
In a paper settlement in South Australia, the Purchaser pays its own Lodgement Fee for the transfer of land via Revnet. However, in PEXA, the Incoming Mortgagee receives an invoice for the whole of the lodgement fees (being lodgement fees for discharge of mortgage, transfer and mortgage).The Incoming Mortgagee may include those fees in its loan breakdown summary to the borrower.
If the loan contract provides that the borrower should pay for the registration of the Mortgage and the Transfer, these can be included in the loan breakdown. The Discharge of Mortgage fee is not included in the loan breakdown as a statutory fee payable by the borrower (the Purchaser), but as part of the total destinations payments paid at the instruction of its customer – being the obligation the customer has to pay funds to the Vendor or as the Vendor directs.
The Incoming Mortgagee can show that the loan proceeds, together with any Purchaser’s equity contributed by the Purchaser’s lawyer or conveyancer, are pooled together and disbursed to the destination accounts specified in the Financial Settlement Schedule. A Settlement Completion Record is available for all PEXA settlements, showing the total source funds and total destination funds.
The statement of adjustments shown earlier demonstrated the adjustment of the Discharge of Mortgage lodgement fee and will result in the following source and destination line items in PEXA.
Sources: South Australian example
Destination: South Australian example
As an alternative, the Representative Subscriber acting for the Vendor could create a source line item with respect to the Discharge of Mortgage lodgement fee, provided it has not also included an adjustment for that fee. PEXA expects Representative Subscribers to determine their preferred approach. Over time, industry may develop its own conventions for treatment of the Discharge of Mortgage lodgement fee in electronic settlements.
In relation to the lodgement fee for a Transfer in South Australia, the Representative Subscriber acting for the Purchaser can either create a source line item for purchaser’s equity (to cover the Transfer lodgement fee, or some higher amount if required) or direct the Incoming Mortgagee in relation to funds required from the loan (which might be sufficient to address all destination line items including the Transfer lodgement fee). - 6. payment of lodgement and pexa fees in a refinance
- The below table shows how the PEXA Fee is paid and receipt of invoices in a Refinance.
Note: Lodgement Fees are always included as a single destination line item in the Financial Settlement Schedule.
Representative Subscribers: Unless the Representative Subscriber has made other arrangements with PEXA, the PEXA Fee will be collected at settlement.
*If the loan contract allows the PEXA Fee to be passed on to the customer, the customer will be charged. If the loan contract does not allow the PEXA Fee to be passed onto the customer, the financial institution will absorb the fee.
^ Where the mortgagee is represented by a Representative Subscriber, the PEXA Fee will be included as a destination line item in the Financial Settlement Schedule and will be taken into account when calculating the total amount of source funds. - 7. bill to instructions
- Where a financial institution or other entity is a Panel Master and a transaction is performed by a Panel Member (Representative Subscriber), ordinarily the Representative Subscriber’s account will be direct debited for applicable Charges where the transaction does not involve Financial Settlement. However, PEXA has introduced functionality which will allow the Panel Master’s account to be direct debited where the Panel Master has provided instructions to PEXA. Where this functionality applies, the Panel Master will receive the invoices for the applicable Charges.
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