PEXA offers a Source Account to some Subscribers, but this does not replace an eligible trust account.To help you understand the distinction, on this page we’ve listed the answers to some of the most frequently asked questions about the PEXA Source Account.
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.
Q. Why does PEXA offer the PEXA Source Account?
The PEXA Source Account is available to eligible Subscribers who do not already operate a trust account with a bank that is integrated with PEXA. The PEXA Source Account is not an alternative to a PEXA eligible trust account.
Q. How much does it cost to use the PEXA Source Account?
There is no cost to use the PEXA Source Account.
Q. Does interest accrue in the PEXA Source Account?
No interest accrues in the PEXA Source Account for the benefit of the purchaser or any party to a PEXA Transaction.
Q. When do I need to ensure funds are cleared in the PEXA Source Account?
Funds must be cleared three business days prior to settlement.
Q. Is money in the PEXA Source Account trust money?
PEXA recommends that you work with your local regulatory body to satisfy yourself of your own professional obligations in relation to handling client money. PEXA also continues to work with the trust account regulators in the relevant jurisdictions to provide guidance on this issue. Some regulatory bodies have deemed money in the PEXA Source Account to be “power money”. For example, the Queensland Law Society guidelines.
If you intend to use the PEXA Source Account, you should familiarise yourself with the requirements regarding power money under the legislation which applies to you.
Q. Am I able to use the PEXA Source Account?
Subscribers should be comfortable that they will meet their regulatory requirements before requesting PEXA to register the PEXA Source Account in their Subscriber Profile.
You must satisfy yourself of your own professional obligations in relation to handling client money subject to each state or territory’s obligations for reporting and record keeping. PEXA cannot advise you in relation to your own reporting obligations.
Completing the Getting Started with PEXA program? See whats next.
In the next article, Setting up SettleMe, we'll show you how you can organise for your clients to receive instant up-to-date notifications as their settlement progresses, using your free property app, SettleMe.