Who’s trust is legally obligated to hold deposit money on a long-term settlement?? BOth real estate agent AND solicitor have both “suggested” it is best in their accounts (of course!)[evil4]
So, I am wondering, if it has to be in a trust, earning interest for the holder, then why can’t it go into my own trust? Or someones’s that I trust? (Pun intended![biggrin])
As the interest would certainly be better in my pocket! And rightly so, being my money! Is the interest supposed to automatically become mine anyway?? Or do I have to include a clause for that??
Also, I am now concerned for friends that recently sub-div’d & made alot of money, but settlement took ages. I know funds were left in their solicitors account, & as they are not the brightest couple, presumably had no idea to ask the same question. I wonder: are they legally entitled to claim back any interest earned by their solicitor on that money??? Thanks in advance.Hi Misty1,
It used to be that the deposit was put into the real estate agents trust account, and then on settlement the interest was divided between the vendor and the purchaser.
These days, that doesn’t automatically happen, and to be honest I’m not sure why. Something to do with legislative changes to do with trust accounts I think. Others on the forum may be able to shed more light on this. I would discuss this with the real estate agent before you buy or sell. You may be able to negotiate.
The other thing you can do as a seller, is to request that the deposit be released to you before settlement. This has to be written into the contract.
Cheers
Janet
0427 778875Great Question Misty. In the past I’ve always paid the RE Agent the deposit and they’ve held it until settlement without a second thought. I never thought about the legal requirement and the money earned from interest. I suppose because I usually negotiate a very low deposit amount.
But if I had a long settlement on a hefty deposit, this could easily add up to thousands.
If your solicitor and RE Agent can’t convince you, then I can offer my bank account as a safe place to hold it for you (he he he)
Live, Learn and GrowLifexperience
Why pay a deposit at all? If you are going to be on a long term settlement then pay with a deposit bond. Otherwise in QLD, you have the option of investing the funds as long as both you and the vendor agree and formally instruct the agent in writing as to how they are to be invested and where with what split of interest etc. Bear in mind though that if you do this and the agent then goes out drops your $100k deposit on red at the Casino and loses the lot you are not covered by the “Claim Fund”. It is entirely at your risk. This can also only be done on settlements with a period longer than 90days or deposits over a set amount.
Personally for a couple of hundred bucks vs the interest earnt on your money in your acount or saved in your offset account even, tthe costs associted with a deposit bond are cheap…
Stuart Milne
Non-Conforming Specialist
READY Mortgages
http://www.readymortgages.com.au
[email protected]
Mob: 0404 056 055I am even more confused now! [confused2]
I have had many conflicting opinions on this. Someone just told me they heard it is a legal req’ment deposits be held in agents trust, but that now interest goes to Gov’t!!
Also, the agent tells me by using a “section 27” I can access the full deposit, as the buyer has agreed to it. Does anyone know anything about legalities of a “27”??
Also, Stuart, I think I confused you. I am the seller,not buyer. So the funds to be acruing interest will be to my advantage, as long as I get the interest!
The buyer has paid 20% deposit, over up to 12months s/ment. SO it could add up to a nice sum.
I might pose this qu in “legals” as well, but any further thoughts??
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