In this article
Kooky
Builder of Shaka, the payment router that pays every agent their commission on closing date.
About Kooky and Shaka →The price of a house does not travel from a buyer to a seller as one payment. On the afternoon a Queensland sale settles, the money is spread across several institutions: a lender advancing a loan, the institution holding the rest of the buyer's money, the seller's own lender waiting to be repaid, and the banks of everyone else who is owed something out of the sale. For the sale to complete, value has to pass between those institutions, and it does so in a place most buyers and sellers never hear named: the accounts that banks keep with the Reserve Bank of Australia.
This guide follows that movement as the official documents describe it. It uses the Reserve Bank's own publications on property settlement, chiefly a Bulletin article of 18 March 2021 and two information papers written for members of its settlement system, and version 7.2 of the Model Operating Requirements published by the Australian Registrars' National Electronic Conveyancing Council (ARNECC) in May 2026. It covers where a property settlement enters the central bank's system, how the amounts are netted, why money is reserved before the title documents are lodged, the published hours and cut-offs, when a seller's money is available, and what the system does when an institution's funds are not there. The steps a law practice takes inside the settlement workspace, and the paying out of a seller's mortgage, are dealt with in other guides in the magazine.
Two layers of accounts
The starting point is a distinction between two kinds of account. The first is the kind everyone has: an account a customer holds with a bank, a building society or another institution. The second is the account that institution itself holds at the Reserve Bank, called an Exchange Settlement Account, or ESA.
Related readVerification of identity: the check before a Queensland e-settlementThe Reserve Bank's Bulletin article describes the system that runs those accounts, the Reserve Bank Information and Transfer System (RITS), as Australia's interbank settlement system. All non-cash payments in Australia that involve a transfer of funds between banks, it says, are ultimately settled in RITS, by debiting the ESA of the paying institution and crediting the ESA of the receiving one.
A payment between customers of two different institutions therefore happens twice. The customer accounts are adjusted on the books of each institution, and the institutions square up with each other across their ESAs. A property settlement is no exception. What makes it unusual is that the squaring up between institutions is tied, minute by minute, to something that happens outside the banking system altogether: the lodgement of title documents with a land registry.
Where property enters the central bank's system
According to the Bulletin article, the Reserve Bank introduced property settlement functionality in RITS in 2014. The article traces the background: e-conveyancing was put on the national agenda by the Council of Australian Governments in 2008, and ARNECC, the council of land registrars that writes the national rules, was formed in 2011.
Property settlements reach RITS in what the Reserve Bank calls batches. A batch is a group of interbank debits and credits that are settled together. The Reserve Bank's page on batches lists two streams for property, one for each electronic settlement network, and describes each as the settlement of the cash leg of property transactions arising in that network's system. The same page names the entity that administers each stream.
Related readThe client authorisation: the form that lets a lawyer sign for youThe Reserve Bank's papers use two terms for the roles involved. The upstream business operator is the business in which the transactions arise: here, the e-conveyancing network that also lodges the title documents with the land registry. The batch administrator is the entity that turns the financial details into a batch and sends it to RITS. The Bulletin article notes that Property Exchange Australia performs both roles for its own network, while Sympli's batches are administered by ASX Financial Settlements.
| Role | Who fills it | What it does |
|---|---|---|
| Upstream business operator | The e-conveyancing network | Holds the transaction and lodges the title documents with the land registry. |
| Batch administrator | The network itself or a separate administrator | Sends reservation, settlement and recall requests to RITS. |
| RITS | The Reserve Bank of Australia | Tests balances, reserves funds, settles across Exchange Settlement Accounts. |
| Settlement institutions | Members of RITS holding an ESA | Pay or receive their net amount and post entries to customers' accounts. |
A batch that nets to zero
A single sale produces many payments. The Bulletin article illustrates a property batch with several destination accounts: the seller's bank account, the revenue authority, the network operator and the council. Each of those sits with some institution, and so does each account the money is drawn from. The information papers do not list the kinds of customer account on the paying side. In an ordinary financed purchase the paying institutions are the buyer's lender and the institution holding the remaining purchase money, which is commonly the trust account of the buyer's law practice.
RITS does not see any of those individual payments. What it receives is one figure per institution. The Reserve Bank's 2014 information paper on e-conveyancing explains that a property settlement arrives as each settlement institution's net position, marked as a debit or a credit, and that the positions in a batch must sum to $0. The companion paper of November 2019 uses the technical name: the batch is multilaterally netted. Every institution's incoming and outgoing amounts for that one settlement are set against each other, leaving it either a net payer or a net receiver.
Related readCyber security duties of firms and lenders on a settlement networkNetting has a visible effect at the edge. Where every account involved in a sale is held with the same institution, nothing is owed between banks. The Bulletin article reports that 6 per cent of the settlements on the first of the two networks involved a single financial institution and so produced no interbank settlement at all.
Each batch carries its own label, a Batch Identification Number assigned by the batch administrator, so that the reservation, the settlement and any recall can be matched to one another.
Reserve first, lodge second, settle third
The Reserve Bank offers two models of batch. Its January 2020 paper on batch processing distinguishes a settlement-only batch, in which a group of transactions is sent for settlement in one step, from a reservation batch, in which the funds are reserved first and settlement follows later. Property uses the second model. The Bulletin article calls it a reservation of funds model, and the sequence it sets out, together with the two information papers, runs as follows.
- Reservation requestThe batch administrator sends RITS the net position of every institution in the settlement.
- Funds reservedRITS tests each paying institution's available balance. If all are sufficient, the amounts are reserved in their accounts.
- LodgementWith the reservation confirmed, the network lodges the title documents with the land registry.
- Settlement requestOnce the registry acknowledges the lodgement, the batch administrator asks RITS to settle.
- SettlementRITS settles at once from the reserved funds: net payers are debited, net receivers credited.
The test at the second step has a precise definition. The 2014 paper says RITS checks each payer against its available balance, meaning its ESA balance less any funds already reserved for other property settlements. One institution cannot count the same dollars twice across two sales that are settling at the same moment.
The fourth and fifth steps are close to simultaneous. The Bulletin article says settlement of funds happens immediately after the settlement request is received, using the funds that were reserved, and both information papers describe it as almost instantaneous. No fresh check is needed at that point, because the money was set aside at the second step.
Related readSigning a transfer without a pen: how digital signatures bind a firmThe whole sequence is short. The Bulletin article gives the average time for which funds stayed reserved in 2020 as about six and a half minutes, and says fewer than 1 per cent of transactions had funds reserved for more than 15 minutes.
What a reservation does, and what it does not
The reservation exists to solve one problem: the title and the money are in two different systems, and neither side of a sale wants its half to complete without the other. Reserving first means the network lodges the documents only when it knows the paying institutions' funds are set aside, and RITS settles only when it is told the lodgement has been acknowledged.
The Reserve Bank is careful about what "reserved" means. The 2014 paper says reserved funds stay in the paying institution's own account but are partitioned: they can be used only to settle the property settlement for which the reservation was made. They have not moved, and nobody else owns them yet.
A reservation gives the receiving side no claim on the money
The Reserve Bank's Bulletin article states that the seller does not have any rights to the funds while they are reserved. Its information papers add that the process gives a net receiving institution no right or entitlement over funds held in another institution's account. Payment happens only at settlement.
The November 2019 paper presses the point further. It says the absence of any entitlement holds regardless of whether lodgement has successfully proceeded or not. In the Reserve Bank's description, then, it is the debit and credit across the ESAs that completes the money side, not the reservation and not the lodgement taken alone.
What the national rules say about the link
ARNECC's Model Operating Requirements are the rule book for the networks, which each state's registrar then determines for its own jurisdiction. Version 7.2, dated May 2026 on its cover, treats the money leg briefly and in its own vocabulary.
Related readWorkspace, subscriber, signer: an e-conveyancing glossary for QueenslandIt defines a Settlement Transaction as a conveyancing transaction that involves a financial settlement. A transfer in which money changes hands is one; a document lodged with no payment between the parties is not. In clause 5.2.1, where the rule book sets out what an operator's system covers, paragraph (d) includes the financial settlement of a conveyancing transaction, if any. In the definitions of version 7.2, "financial settlement" is used as an ordinary phrase and is not itself given a defined meaning.
The link between money and lodgement appears in the tenth operating requirement. The table of contents of version 7.2 lists requirement 10.8 under the heading "Presentation once financial settlement is irrevocable" and requirement 10.9 under the heading "Presentation following Duty payment or commitment". The headings show the principle the registrars work from: the documents that change the register are tied to the certainty of the money, and to the duty owed to the State.
The rule book also fixes the hours in which a network must be available. Core Hours are defined as 6:00am to 10:00pm, Australian Eastern Standard Time or Australian Eastern Daylight Time as applicable, on each business day. That window is wider than the window in which money can move between banks, which is set by the Reserve Bank and not by the registrars.
The hours and the cut-offs
A property settlement can complete only while RITS will accept and settle property batches. The Bulletin article gives the span: property batches settle from 9.15 am to 6.30 pm AEST, or 8.30 pm AEDT. The two information papers break the end of the day into two separate cut-offs.
Related readFour doors, no counter: how a document reaches Queensland's land register| Event | Normal day | NSW bank holiday, August and October |
|---|---|---|
| First reservations accepted | After the Daily Settlement Session opens at 09:15 | Not stated separately |
| Last new reservation | 18:05 AEST or 20:05 AEDT | 17:10 |
| Last settlement or recall | 18:30 AEST or 20:30 AEDT | 17:35 |
| Unsettled reservations | Released at 18:30 AEST or 20:30 AEDT | Released at the final cut-off |
Source: Reserve Bank of Australia, "E-Conveyancing and Interbank Settlement in RITS" and "ASXF Batch Information Paper". The 2014 paper notes the holiday times are subject to change.
The gap between the two evening cut-offs is 25 minutes. It allows a settlement whose funds were reserved just before the first cut-off to be lodged and settled, or recalled, before the system stops. After the second cut-off, the 2014 paper says, RITS releases any funds still reserved and will not settle any property settlement.
Queensland keeps the same clock all year, so the summer figures, which the Reserve Bank states in daylight time, fall an hour earlier in Brisbane: 20:05 AEDT is 7.05pm and 20:30 AEDT is 7.30pm Queensland time.
The 2019 paper also records that on the June public holiday for the sovereign's birthday, interbank settlement of reservation batches through RITS cannot occur, even where a land registry may be open.
In practice few settlements run close to the limit. The Bulletin article reports that the busiest hour is 2.00 pm to 3.00 pm, which accounts for around 30 per cent of a day's settlements. The times a network or a law practice sets for its own files are a different matter from these system times and are not covered by the Reserve Bank's papers.
When the seller's money is available
The official documents give a clear answer to part of this question and are silent on the rest.
The clear part is the order of events. Before settlement the seller has no rights to the reserved funds, as the Bulletin article puts it. At settlement, the ESA of the seller's institution is credited, almost instantaneously after the settlement request. From that moment the seller's institution has been paid by the buyer's side, with funds at the central bank.
The next step belongs to the institution. The Reserve Bank's January 2020 paper on batch processing says that members, on receiving advice that a batch has settled, post the upstream transactions to their customers' accounts. That is the entry a seller sees: the sale proceeds appearing in the account nominated for them, and, where the seller had a loan, the payout applied to that loan.
The silent part is the timing of that last entry. None of the Reserve Bank publications cited here states how long an institution takes to post the credit after interbank settlement, or when the customer may draw on it. The information papers describe the interbank layer only, and what a receiving institution does for its own customer afterwards falls outside them.
When the funds are not there
The design means a shortfall is discovered before anything irreversible has happened. The papers describe four situations.
A paying institution is short at the reservation. If any payer in the batch does not have a sufficient available balance, RITS rejects the reservation request. Nothing is reserved for anyone in that batch, and because lodgement comes only after a confirmed reservation, the title documents are not lodged. The 2014 paper adds a detail about confidentiality: the batch administrator can see which institution lacked the funds, but the other institutions in the batch cannot.
The reservation succeeds but the lodgement fails. The batch administrator sends RITS a reservation recall request, and the reserved funds are released back to the paying institutions' ordinary use. No money has moved between banks.
Time runs out. Funds still reserved at the final cut-off are released automatically, and that settlement cannot complete through RITS that day.
A participating institution is suspended. The 2014 paper says that if a settlement institution is suspended in RITS, existing reservations in which it is a party cannot be settled and any outstanding property settlements are rejected. The 2019 paper makes the related point that if a paying institution is declared insolvent, the reservations involving it cannot settle.
In the first two cases nothing has been lodged and nothing has been paid, and in none of the four has money passed between the banks. What a missed settlement means under the contract of sale is a legal question between buyer and seller, and the magazine's guide to delayed settlements covers it. One small point on cost comes from the 2014 paper: the Reserve Bank's transaction fees apply only to property settlements that settle, and there is no fee for a reservation.
How much moves this way
The figures the Reserve Bank has published show how completely this route replaced the older one. By November 2020, the Bulletin article says, more than 75 per cent of property transfers in Australia were being settled electronically. Over the six years from December 2014 to December 2020, the use of financial institution cheques, the bank cheques that used to be handed across a table at a paper settlement, fell by around 75 per cent.
The article also describes the batches themselves. The median property batch in 2020 was worth around $640,000, and the average value had peaked near $1 million in late 2019. Fridays carry around one-quarter of the number and value of all batches. Year-on-year growth in activity had eased to about 25 per cent by December 2020, after the surge the article attributes to state mandates from 2017 onwards.
On the question of more than one network, the Bulletin article records that the states and territories agreed to mandate interoperability, which it describes as allowing a user who subscribes to one network operator to transact with a user of another without having to subscribe to both. The article is from March 2021, and where that program stands now is the subject of a separate article in the magazine.
The buyer's money is never left waiting for the title, and the title is never left waiting for the money. Each moves only when the other is ready.
Kooky, from Shaka
Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.
