(NSW) Solicitor doesn't have a trust account

I've just found a similar thread on here from 2018 but mine is in far-western NSW and he's a solicitor as opposed to a regular non-lawyer conveyancer.

They are talking about using the lender's trust account to hold the mortgage funds for the purchase. Is this normal?

 

That would be pretty unusual for a conveyancing lawyer over in WA. Not sure if it's different over your end.

I will say that generally if I practised privately I wouldn't use a trust account myself, so that in itself isn't unusual (but I wouldn't do conveyancing work either).

 

Why is the solicitor/agent or anyone else going to hold the funds for settlement other than the deposit?

Banks draw down their payment on settlement day, why is this any different?

 

How else will I get the funds to the vendor? Should I talk to the bank?

 

Generally you will have a bank account with the bank that you're obtaining finance with, you will deposit the funds needed to complete settlement into that account thats under your name.

At settlement date the solicitor will provide directions to the bank where the money is disbursed to, eg portion to vendor, OSR, his fees etc.

 

If you are obtaining finance from a non-ADI lender then you won't be able to setup a savings account for them to draw from.

I assume in this case the standard practice would be putting the shortfall in the solicitors trust fund for them to disburse at settlement?

 

Correct

 

Not all solicitors have a trust account. It is expensive and means a audit cost. You may merely need to have the funds accessasable to the lender. Lenders only settle THEIR loan proceeds and usually you must ensure your solicitor handles your element. Their settlement agent may have a trust account for this purpose. A specific offset or clean savings account (or ability to drawn on the loan) may suffice as long as you only credit the settlement proceeds and no more. In the olden days a bank cheque was also suitable but these days bank cheques are considered on same terms as a personal cheque as forgery is always a possibility.

Lenders dont have a "trust account". Lenders have customer accounts.

 

PEXA has a trust account that could potentially be used.