Is trust account safe?

We are approaching a cash settlement, and our conveyancer has asked to transfer the fund to their trust account, just wondering if that's a safe thing to do or if there's another way? I recall my last settlement I had signed an authority form to allow the conveyancer to access the fund in my account, is that a better way?

And also, is PEXA safe approach to settle? That current affair scared a lot of vendor out lol... Just getting a bit cautious considering this is a cash settlement...

 

It’s very safe if you double check everything verbally over the phone for account details.

 

+1 - confirm it verbally or in person rather than just email.

 

why use a conveyancer?

I would be worried myself.

 

We use our trust account for settlements every day. Anti-fraud protocols are in place (e.g. ringing to verify emailed bank accounts details) and we’ve never had an issue.

The PEXA e-conveyancing system requires the purchaser’s contribution money (your savings) to either come from a bank account associated with the incoming mortgagee bank (like an existing offset or savings account with your mortgage bank) or a solicitor/conveyancer/settlement agent’s trust account.

There is no way to link any other bank account. If your mortgage bank doesn’t have the ability to electronically withdraw your contribution money, it will need to be deposited into your solicitor/conveyancer’s nominated trust account. Conveyancers that don’t operate trust accounts can use the PEXA “holding account” or a settlement agent’s account, depending on their preferred protocols.

So if you’re not getting a mortgage and paying cash, it all has to go into a trust account - there is no way for PEXA or your solicitor/conveyancer to link to your personal bank account.

 

Few people know that a solicitors trust account is insured by the Law Society Fidelity Fund. The practicing member contributes to a fund for this purpose. I have encountered several client instances of loss that has been repaid.

Administered by the Law Society under provisions in the legal profession legislation, the Fund exists to compensate persons who suffer pecuniary loss due to defaults by law practices arising from dishonest acts or omissions of associates of the practice relating to trust money or property.

Conveyancers dont have this safeguard. I cant imagine they are more trusted and have zero fraud.

There may be reasons why a vendor may want a buyer to use a independent solicitor and not a conveyancer. It may assist in final settlement. Its a free form of insurance.
You do not have to be a client of the solicitor or firm that has committed the dishonesty. Any person who has suffered financial loss may make a claim on the Fidelity Fund

 

that is an interesting point you made Paul. "Vendor can request a buyer to have a independent solicitor" If I am the vendor ,does it matter if the buyer has a conveyancer, as long as I have a solicitor ,it is fraud proof .

 

If the buyer uses a conveyancer who steals the money, who will pay you?

 

The vendor has no say in who the purchaser uses for their conveyancing work. If an independent solicitor is going to cost the purchaser more than their preferred conveyancer, will the vendor pay the difference?

 

That is buyer"s problem .if the vendors solicitor doesn't receive the money into their nominated account ,sale doesn't go ahead ,I would expect

 

Yes, and if you are the seller and you were planning to use that money to buy another property? It still affects the seller.