Trust Money & Property Settlements in NSW

Trust money handling and settlement are critical stages of a property transaction. Understanding how funds are managed and how settlement occurs helps buyers and sellers feel confident that the transaction is completed correctly.

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This page provides general information about trust money and the settlement process for property transactions in New South Wales.

What Is Trust Money

Trust money refers to funds received on behalf of a client that must be held in a designated trust account.

In property transactions, trust money commonly includes:

• Deposits paid on exchange

• Funds held pending settlement

• Adjustments collected prior to completion

Strict rules apply to how trust money is received, held and disbursed.

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How Trust Money Is Held

Trust funds are held separately from business operating accounts and are subject to legislative and regulatory requirements.

Key principles include:

• Funds must be accounted for accurately

• Trust money can only be used for its intended purpose

• Detailed records must be maintained

• Disbursement occurs only when authorised

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These requirements are designed to protect client funds throughout the transaction.

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Deposits Held in Trust

In most residential transactions, a deposit is paid on exchange of contracts and held in trust until settlement.

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Important considerations include:

• Whether the deposit is released early to the seller

• Buyer consent requirements for early release

• Protection of deposit funds

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Understanding how deposits are managed helps parties plan for settlement.

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Preparing for Settlement

Settlement preparation involves coordinating legal, financial and administrative requirements to ensure the transaction completes on time.

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This may include:

• Calculating settlement adjustments

• Confirming payment of rates and outgoings

• Liaising with lenders and agents

• Preparing settlement statements

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Settlement dates are agreed in the contract and should be carefully monitored.

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Electronic Settlements

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In NSW, most property settlements are completed electronically using platforms such as PEXA.

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Electronic settlements allow:

• Secure transfer of funds

• Lodgement of documents

• Registration of title changes

This process reduces delays and improves accuracy when completing property transactions.

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Settlement Day

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On settlement day:

• Funds are exchanged

• Ownership is transferred

• Mortgages are discharged or registered

• Title records are updated

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Once settlement is confirmed, keys are typically released through the selling agent.

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After Settlement

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After settlement:

• Final statements are issued

• Trust accounts are reconciled

• Records are retained in accordance with regulatory requirements

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Parties should keep settlement documentation for future reference, including taxation and ownership records.

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Why Understanding Trust Money Matters

Trust money and settlement processes are central to the integrity of a property transaction.

Understanding how funds are handled and how settlement occurs helps ensure transparency, confidence and peace of mind throughout the process.

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Important Note

The information provided on this page is general in nature and does not constitute legal or conveyancing advice. Trust money handling and settlement processes may vary depending on the transaction and individual circumstances.