Most property settlements in the ACT now happen online. PEXA has handled more than 80 per cent of property transfers lodged digitally in recent years, making it the dominant platform for electronic conveyancing transactions across Australia.
This shift changes how law firms manage client money and trust accounts. If you run a legal practice in the ACT, you need to understand how eConveyancing connects to your trust account audit obligations. Clear processes, accurate records, and timely reconciliations are not just mandatory; they are essential for compliance and risk control.
This article explains your obligations under the Legal Profession Act 2006 and helps you stay compliant.
What are PEXA and eConveyancing?
In the ACT, PEXA (Property Exchange Australia Limited) operates as the main Electronic Lodgment Network Operator, or ELNO. ELNO stands for “Electronic Lodgment Network Operator”. It allows solicitors and conveyancers to complete financial settlements and lodge title documents online.
You can check your practice management software settings. Ensure your system can record PEXA transactions correctly so you don’t miss key details required for your trust account records.
Practitioner Trust Account vs. PEXA Source Account
ACT legal practices generally follow one of two paths when settling property transactions electronically.
The Practitioner Trust Account
Some firms hold a general trust account authorised under the Legal Profession Act 2006. In this model, you receive client funds into your trust account first. Then, you transfer those funds into the PEXA workspace to complete the settlement.
The money moves from your trust account, through PEXA, and finally to the ultimate payees such as the Australian Tax Office, the ACT Revenue Office, or the vendor’s mortgagee.
The PEXA Source Account and Power Money
Other firms do not hold their own trust account. Instead, they rely on the PEXA Source Account. This is a special-purpose account that PEXA maintains with an authorised deposit-taking institution to hold settlement funds.
Here are the rules that become critical. When a purchaser gives you money to pay into that PEXA Source Account, you exercise control over those funds. The law defines this as “power money.” Under section 17A of the Legal Profession Regulation 2007, power money is legally classified as trust money, even though it never enters your firm’s bank account.
You hold it in a statutory capacity, and that triggers specific record-keeping duties.
A fact here is that the ACT Law Society confirms that power money must be paid into the PEXA Source Account within seven days of receipt, just like standard trust money.
Trust Account Audit Obligations in the ACT: Compliance Deadlines for ACT Firms
To stay on top of your trust account obligations, you need to understand the key dates in the ACT trust accounting year.
31 March: Trust accounting year ends
The trust year runs from 1 April to 31 March each year. This is the cut-off date for calculating your statutory deposit amount. You need to determine the lowest balance your general trust account fell to at any point during those 12 months.
8 April: External examiner must be appointed
If your firm needs a full external examination, you must engage an external examiner by 8 April. You can only appoint someone from the Law Society’s list of designated external examiners. You also need to notify the Society in writing within one month of making the appointment. Note that the Law Society will not allow you to appoint an external examiner who is related to your firm’s regular bookkeeper.
31 May: External examination report due
The external examiner’s report must be received by the Law Society no later than 31 May. Delays in receiving this report can affect the issue of your unrestricted practising certificates for the new financial year.
30 June: Statutory deposit payments due
Any payment required to be made to the Society must be received by 30 June. You calculate the amount as two-thirds of the minimum general trust account balance during the year, but only if that minimum balance exceeded $3,000. Even if you do not need to make a payment, you still must complete and send the Statutory Deposit Calculation form to the Law Society.
1 to 30 April: Statutory declaration window for exempt firms
If your firm claims the audit exemption (no trust money held, or only transit money and PEXA Source Account funds), you must lodge a specific Statutory Declaration with the Law Society during April. You cannot make this declaration before 31 March. Firms using the PEXA Source Account need to include wording that confirms the only Power of Attorney money dealt with is passed through the PEXA platform.
July: Authorised Signatories Notice required
During July each year, you must provide written notice to the Law Society listing all associates and legal practitioners authorised to sign cheques or withdraw money from the general trust account as at 1 July.
Critical Record-Keeping Obligations
Even if you qualify for the audit exemption, the law still requires you to maintain specific registers and documents
The Register of Powers and Estates
Section 61 of the Legal Profession Regulation 2007 requires every ACT law practice to keep a Register of Powers and Estates. This applies whether you hold a full trust account or only deal with PEXA Power Money.
This register must record every occasion when you exercise control over money belonging to another person. For PEXA settlements, this means each time you receive funds from a client to pay into the PEXA Source Account or direct funds out to a beneficiary.
The register should include:
- The date you received the power
- The name of the person who gave you the power
- The amount involved
- The date you exercised the power
- Details of the matter reference
Why the Settlement Completion Record matters
PEXA generates a Settlement Completion Record at the end of each electronic settlement. This document shows exactly where every dollar moved during the transaction. It lists payments to the ACT Revenue Office for stamp duty, transfers to mortgagees, and final balances to vendors.
The ACT Law Society strongly recommends keeping this record in your client file. Your firm’s bank statement may only show a single lump sum payment leaving your account to PEXA. It does not show the individual payments to the tax office or the vendor.
The Settlement Completion Record fills that gap. External examiners rely on it to verify that funds went to the correct destinations and that no money went missing.
Recording electronic payments
Section 42(5) of the Regulation sets strict rules for recording electronic funds transfers out of a trust account. You must record:
- The name of the account holder who received the payment
- The bank’s name
- The BSB number
- The account number
This creates a challenge with PEXA because the platform bundles multiple payments together. Your trust account software may only show one payment to PEXA rather than the 10 individual payments that occurred inside the workspace.
The ACT Audit Exemption Explained
The biggest compliance question for ACT firms is whether you need a full external examination of your trust records.
The answer depends on how you handle money.
In the November 2020 update, the ACT Government amended the regulations to clarify the rules for electronic conveyancing. These changes created a clear exemption for firms that only deal with PEXA money.
Scenario A is about a full audit required
You must have a full external examination of your trust records if you receive any general trust money during the financial year. This includes standard deposits, advance costs, or funds held for ongoing matters. No exemption applies here.
Scenario B is about the audit exemption
You qualify for the exemption if the only trust money you handle during the period falls into these categories:
- Transit money (funds you receive and pay out quickly, such as settlement cheques)
- Money received into or held in a PEXA source account
This means if your practice uses the PEXA Source Account for settlements and never holds general trust money, you can avoid the cost and complexity of a full external examination.
Statutory declaration required
You cannot simply assume the exemption applies. The law requires you to lodge a specific Statutory Declaration with the ACT Law Society during April each year. This declaration confirms that the only power money you dealt with passed through the PEXA platform. Fail to lodge it, and you risk non-compliance even if you handled no other trust money.
Here is a fact that the statutory declaration must cover the period from 1 April to 31 March. You have from 1 April to 30 April each year to lodge it with the Law Society.
Check our Trust account Audit in ACT
Are you confident that your trust account records would pass an external audit without adjustments?
Number Solutions works with law firms and conveyancers to strengthen trust accounting systems, prepare for annual audits, and reduce the risk of regulatory breaches. If you want practical support with reconciliations, internal controls, or audit preparation, speak with our team today and make sure your compliance framework is solid before your next reporting deadline.
Book now to get a consultation with Number Solutions today.
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