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Member Helpline Q&A
Where an agent is required to invest a deposit on a sale pending completion, it is important to follow correct procedure to ensure compliance with the Property, Stock & Business Agents Act 2002.
First and foremost, it is vital that an agent obtains uniform instructions in writing from both the vendor and purchaser and/or their respective solicitors.
Second, as interest earned on trust accounts is normally paid to the Statutory Interest Account, an agent would also be required to complete a trust account exemption notice which notifies the deposit-taking institution that the account is exempt from the provisions of section 90(7) of the PSBA 2002 and 34(b) of the Regulation - this notice is often referred to as the “pink form”.
Third, under most circumstances, the interest earned on the investment of the deposit would usually be divided equally between the parties to the sale but, again, the agent should always rely on written instructions.
Finally, all parties entitled to interest earned on the deposit would also normally be requested to provide tax file numbers, as failing to do so could otherwise result in the deposit-taking institution deducting withholding tax from the interest earned on the monies invested.
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