SOURCE ACCOUNT FOR VENDOR

[mhouse]

Please provide an update on when a source account for the vendor will be available.

Please prioritise this in order to allow PEXA to provide a full service solution. In cases where the funds from the sale do not cover the mortgage, this account is needed for both the agent to deposit the balance of deposit funds and the vendor to deposit any top up funds required.

I see this has been requested for some time and I imagine the deadline is 30 September 2018.

It would be ideal to have it earlier.

Please advise a scheduled implementation date.

[Ames · Accepted solution]

There’s certainly work going on in the background on this. However, with expanding the PEXA Source Account to other roles, the biggest road blocker is that the account currently used for Purchaser side transactions is only set up for that specific and limited purpose, so it’s not as simple as just technically enabling the same account for the Vendor side. The operational changes and considerations to make this change happen are more significant than the work required to actually build the feature into the platform. At this stage we are not ready to commence build work until all operational matters are resolved and we will provide updates here when there is something more substantial to report back with.

We do understand that this is a significant pain point for a segment of the industry. Whilst we have not scheduled this change yet for a future release, there are existing funding options for PEXA transactions which can be used today:

• Funds can be provided via a registered trust account for all practitioner roles
• Where a practitioner does not operate a trust account, funds can be provided by the PEXA Source Account in the incoming proprietor role
• Purchaser funds can be provided by the incoming mortgagee if it holds authority to debit the purchaser’s account
• In certain circumstance, funds can be provided by a bank in the source funder role 

Ames

[cpodosky]

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@Ames wrote:

There’s certainly work going on in the background on this. However, with expanding the PEXA Source Account to other roles, the biggest road blocker is that the account currently used for Purchaser side transactions is only set up for that specific and limited purpose, so it’s not as simple as just technically enabling the same account for the Vendor side. The operational changes and considerations to make this change happen are more significant than the work required to actually build the feature into the platform. At this stage we are not ready to commence build work until all operational matters are resolved and we will provide updates here when there is something more substantial to report back with.

We do understand that this is a significant pain point for a segment of the industry. Whilst we have not scheduled this change yet for a future release, there are existing funding options for PEXA transactions which can be used today:

• Funds can be provided via a registered trust account for all practitioner roles
• Where a practitioner does not operate a trust account, funds can be provided by the PEXA Source Account in the incoming proprietor role
• Purchaser funds can be provided by the incoming mortgagee if it holds authority to debit the purchaser’s account
• In certain circumstance, funds can be provided by a bank in the source funder role 

Ames

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Thanks Ames. We very much look forward to a future enhancement on this topic.

[clovelly]

Dear Ames,

While I appreciate that creating a source account for vendors (and other roles) has some operational challenges for PEXA.

Could a workaround be extending your existing trust account functionality to a limited number of dedicated PEXA trust accounts managed by your customer support, with the appropriate level of PEXA management sign-offs?  The practitioner's firm could execute a separate agreement with PEXA for this a specific undertaking.  Your customer support could undertake a set of challenge statements (or SMS codes) with the practitioner as a means of VOI. 

I appreciate this is taking a non-traditional approach to a trust account and PEXA's purchaser centric funding system.  However, the PEXA practitioners need a workaround while you develop a permanent solution.

[Ames]

Hi @clovelly

The difficulty there would be PEXA is only the trustee for purchasers, so any other person contributing funds to the account would not be the beneficiary of those funds. As trustee, PEXA can only act on the instructions of the Subscriber representing the purchaser, and setting up additional accounts, on its own, would not give PEXA the authority to receive vendor funds into those accounts.

I refer to the Service Charter, which says: "Funds held in the PEXA Source Account will only ever be held on trust for the purchaser of the property the subject of the Conveyancing Transaction."

Also these FAQS (emphasis added to relevant sections):

"Q. What is the PEXA Source Account?

Practitioners who do not have a statutory trust account, or have a statutory trust account with a Financial Institution that is not currently integrated with PEXA, may wish to use the PEXA Source Account to contribute funds to a Financial Settlement. Money in the PEXA Source Account is held by PEXA as trustee for the Purchaser in a Conveyancing Transaction and will be dealt with on instructions from the relevant Subscriber. Funds are held on trust for the Purchaser and direction for use of funds can only be given by the Purchaser's Subscriber. "

Ames

[pcurraey]

Can a private incoming mortgagee deposit loan funds to the Pexa Source Account for a transaction? 

[Ames]

Hi @pcurraey

For now, the PEXA Source Account can only be used for contribution of purchaser funds and not by mortgagees.

There is another conversation about the PEXA Source Account here.

Ames

[Ashlee]

I am just wondering if there has been any progress on this ?

[BellConveyancing2795]

I wonder if we are any closer to a resolution?

[NPConveyancing]

I hope this happens soon. It is a serious flaw in the system.