As a result of concerns about the security of funds transmitted following PEXA transactions, PEXA has released details of the PEXA residential seller guarantee which is available to sellers in the event of certain kinds of fraud.
The guarantee applies to settlements of the sale of residential property on or after 29 June 2018 where the seller’s funds are misdirected after the seller’s lawyer or conveyancer has entered the correct bank account details into the PEXA platform. There is a $2 million cap and there are some exclusions.
To make a claim on the guarantee, a claim form must be received by PEXA within three business days of settlement.
PEXA says that if a seller does not receive their funds into their bank account, they should immediately contact their lawyer or conveyancer. The lawyer or conveyancer should confirm that the bank account details in the settlement schedule in the PEXA platform match the seller’s instructions.
If those details do not match, then it is likely that the payment of the seller’s funds have been misdirected. If this occurs, it is important that lawyer or conveyancer contacts PEXA immediately.
Following such contact, PEXA will contact the bank to which the vendor’s funds were paid and seek to stop any withdrawal of those funds.
Where a misdirected payment involves a fraud committed by a third party, the seller may be entitled to make a claim under the PEXA Residential Seller Guarantee.
If the misdirected payment resulted from a suspected fraud, it is also important that the lawyer or conveyancer reports the suspected fraud to the police.
Lawyers are being advised by their insurers to contact clients by telephone to confirm verbally any changes to clients bank account details.