Compulsory use of the Pexa Platform
From 1 July 2018 in New South Wales any standalone transfers of real estate must be effected through the electronic platform, PEXA. A standalone transfer is a transaction where there is no discharging mortgagee and no incoming mortgagee.
This may be a common transaction for charitable organisations or not for profits who have the benefit of stamp duty exemptions and wish to transfer real estate from one or more entities to a central related holding entity.
The process supersedes the signing of paper documents by signatories and instead requires that they be identified through a verification of identity process which involves providing at least one form of photographic identification and often two forms, or one form supported by a birth certificate, Medicare card, pension card, utilities bill etc. Furthermore, any payments to the organisation must be by electronic transfer of funds to a nominated bank account, details of which must be provided to advisers.
The PEXA arrangements have been criticised recently due to fraudulent hacking where funds had gone missing. The PEXA platform has introduced additional security measures to prevent new fraudulent subscribers gaming the system and acquiring profiles without PEXA verification.
As the system is anticipated to remain compulsory for these standalone transactions, and then from 1 July 2019 to become compulsory for all transactions in most states, we urge readers to be particularly vigilant when making known their account particulars to their advisers. For example, we suggest that the most prudent communication of these details be done in person or verbally: where email communication cannot be avoided, we recommend they be included in a pdf attachment, and not in simple email message: advisers are alerted to check verbally before depositing funds via PEXA, that the account details have not changed. Likewise, clients should be vigilant if receiving advice from an adviser on a change to their account particulars, especially accompanied by a request that funds are due for deposit to a “new” advisers account.