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Trust account withdrawals, payments and authorisations
Cheques from the trust account must:
- be marked ‘not negotiable’ and made payable to a specific person(s), not to the bearer or cash
- include the name of the conveyancing business, with the expression ‘conveyancing business’ or ‘conveyancing business trust a/c’.
Each trust account cheque must be signed by you or an authorised employee. All payments made by electronic funds transfer (EFT) must be under the direction/authority of you or an authorised employee.
Recording trust account payments
As soon as practicable after making a payment you must use the trust account payments cash book to record, in date order, the:
- date and number of the cheque/transaction
- amount paid/transferred
- name of the person the payment is to be made to, or, in the case of a cheque made payable to an Approved Deposit-taking Institution (ADI), the name or BSB of the ADI. For EFT payments you also need to record the account number the amount was transferred to and relevant BSB number
- name of the person the payment was made on behalf of and the matter reference
- ledger account to be debited
- purpose of the payment.
You must record the same details in the trust ledger account but do not include the name of the person the payment was made on behalf of or the matter reference - these are in the title of a trust ledger account.
A client can authorise journal transfers to transfer trust money from one trust ledger account to another.
The transfer must be authorised by the licensee or an authorised employee.
You must keep a trust account transfer journal if you use these transfers - pages and entries must be consecutively numbered.
You must record:
- the date of the transfer
- the trust ledger account the money is transferred from (including identifying reference)
- the trust ledger account the money is transferred to (including identifying reference)
- the amount transferred
- enough details to identify the purpose of the transfer
- the matter reference
- a short description of the matter
- the name of the person who authorised each transfer.
Handling transit money
Transit money must be delivered/paid according to the client's instructions, or as soon as practicable if no time is specified.
The same process should be followed for general trust money received in cash or by EFT.
If non-cash payment is made, you must record details to identify the transaction.
Withdrawing money for costs
Trust money can only be withdrawn if:
- there is a cost agreement authorising the withdrawal
- you have the client’s written instructions and authorisation for the withdrawal
- you have sent a bill to the client for costs and within seven days of receiving the bill, they have not objected to the withdrawal
- the client has objected but have not made a complaint to Consumer Affairs Victoria or an application to the Victorian Civil and Administrative Tribunal (VCAT) within 60 days
- the money is otherwise legally payable.
Instructions/authorisations must be written and kept as a permanent record.
Handling controlled money
You must have one controlled account for each client. It must be held with an ADI and you must have exclusive control.
Any cash must be deposited in the controlled money account before further action.
A controlled money account name must include the:
- licensee’s name
- words ‘controlled money account or CMA/c’
- account’s purpose and details to distinguish it from other accounts.
Steps for dealing with controlled money
As soon as practicable after receiving controlled money you must:
- prepare a receipt and give the original to the client on request
- enter transaction details in the register of controlled money
- deposit the money into the controlled money account.
Preparing and issuing receipts
Controlled money must have a separate receipting system from all other accounts.
Receipts must include the:
- name and details identifying the controlled money account to be credited
- words 'controlled money receipt'.
No receipt must be made for interest or other income received from the investment of controlled money and credited directly to a controlled money account.
Withdrawing controlled money
You must have the client’s written authorisation to withdraw and make payments from controlled money accounts.
A withdrawal must be made by you or directed by you or an authorised employee. For every withdrawal you must record in the register or electronically, in sequential order:
- the date and number of the transaction
- the amount withdrawn
- if an EFT - the name and number of the account the amount was transferred to and the BSB number
- the name of the person payment is to be made to or, in the case of a payment to an ADI, the name or BSB number of the ADI and the name of the person receiving the payment
- the name of the person making the payment and the matter reference
- the purpose of the payment
- the person/s effecting, directing or authorising the withdrawal.
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