New technology is driving more rapid change than ever before, and change in digital technology is accelerating each year. Today, people expect to manage their lives around technology. They want greater efficiencies, fewer errors, more transparency, fewer delays. It is critical for every industry to keep pace with changing technology.
The term e-Conveyancing refers to a conveyancing transaction where the representatives of the parties have elected to settle electronically through the electronic platform provided by Property Exchange Australia Limited (PEXA).
e-Conveyancing minimises the manual processes and paperwork associated with property settlement by enabling lawyers, conveyancers and financial institutions to transact together online.
e-Conveyancing enables representatives of the parties to lodge documents and complete financial settlements electronically.
e-Conveyancing does not cover the whole of the conveyancing transaction; just the preparation for and execution of settlement and registration. In relation to the settlement itself, the platform is essentially a virtual settlement room.
PEXA (Property Exchange Australia) is Australia’s online property exchange network. It assists members – such as lawyers, conveyancers and financial institutions – to lodge documents with Land Registries and complete financial settlements electronically.
PEXA was formed in 2010 to fulfil the Council of Australian Governments’ (COAG) initiative to deliver a single, national e-Conveyancing solution to the Australian property industry. It was originally known as National e-Conveyancing Development Limited.
PEXA is both the company providing the electronic platform and the electronic platform system itself. Currently, PEXA is the only electronic lodgement network operator (ELNO) operating in NSW and the other participating States and Territories.
The company PEXA was formerly known as NECDL and, like ARNECC, has its genesis in an Intergovernmental Agreement signed by participating jurisdictions.
PEXA, the company, is limited by shares and its key shareholders are the Victorian, New South Wales, Queensland and Western Australian Governments, as well as the ANZ Bank, Commonwealth Bank, National Australia Bank, Westpac, and Macquarie Capital, together with the Link Group and the Little Group.
The origins of e-Conveyancing
The principal legislation, first enacted in NSW and then replicated in participating States and Territories, is the Electronic Conveyancing National Law (ECNL).
The national regulatory framework for e-Conveyancing was developed by the Australian Registrars’ National Electronic Conveyancing Council (ARNECC), a body comprised of the Registrars from all Australian States and Territories.
Two sets of Rules have been made pursuant to the ECNL:
- the Model Participation Rules (MPR), which govern the relationship between the electronic lodgement network operator (ELNO) and participants in the system, such as lawyers; and
- the Model Operating Requirements (MOR), which govern the relationship between the ELNO and the land title registries.
The activities and responsibilities of lawyers using e-Conveyancing are primarily governed by the ECNL and the MPR, but it should be noted that further refinements of the MPR and MOR are continuing.
Mandatory transition to electronic conveyancing
The property industry is transitioning towards a 100% digital future. In July 2016, NSW Government announced plans to transition to e-Conveyancing and to progressively phase out paper certificates of title in NSW.
From 1 July 2018, a caveat can only be lodged electronically; paper caveats will not be accepted for registration. Also, from 1 July 2018all Stand alone transfers (such as where the purchaser is using cash to purchase the property and there is no bank involved in the transaction) must also be lodged electronically.
By July 2019, all transfers, mortgages and discharges of mortgage must be lodged electronically for registration. Already, just under one third of all lodgements in NSW are electronic.
For a lawyer to conduct the client’s conveyance using the electronic platform, the client must first provide written authorisation in the form of a Client Authorisation, a prescribed form in Schedule 4 of the MPR
Through the Client Authorisation, the client expressly authorises the signing of documents on its behalf, the lodgement of documents such as transfers for registration, the financial settlement of the conveyance and anything else necessary to complete the transaction.
Verification of Identity
In conjunction with the Client Authorisation, taking reasonable steps to identify the client is a keystone of e-Conveyancing. Schedule 8 of the MPR contains the Verification of Identity Standard (VOI Standard). Compliance with the VOI Standard ensures that a lawyer will be deemed to have taken reasonable steps to identify the client, that is, have the benefit of “safe harbour”. The advantage of safe harbour is the lawyer avoids the evidentiary burden of establishing he or she took reasonable steps in identifying his or her client. The verification may be undertaken by the lawyer or may be provided by an Identity Agent. There are a number of commercial providers of verification of identity services.
Documents such as the transfer and the financial settlement statement are digitally signed in the electronic workspace using a digital certificate. A law practice Subscriber must obtain a digital certificate. The Subscriber Administrator then appoints the lawyer that will be Signers for the practice. Each Signer must then have his or her identity verified before being provided with a “Child” digital certificate. Signers are authorised to digitally sign registry instruments and the financial settlement statement. Electronic certificate of title as it is not possible to provide a paper certificate of title in an electronic workspace for settlement, a new approach is required. The shift to an electronic Certificate of Title (eCT) has already begun and by 1 July 2019 any remaining paper certificates of title will be cancelled.
Benefits of e-Conveyancing
- Greater assurance and protection for parties that dealings will be registered almost immediately after settlement, avoiding the risk inherent in delays. If you are buying a property, you can have peace of mind that you will be registered as the owner of the property within minutes of settlement, rather than waiting for your lawyer or your lender to register the transfer at the land registries, a process that can take weeks and costs more.
- Reduction of risk and costs associated with using bank cheques for settlement.
- Elimination of the time and cost involved in instructing settlement’s agents and their attendance at physical settlements and lodgement at land registries
- Less reliance on payout figures provided on the morning of settlement with the workspace facilitating an agreed range for the payout figure.
- Access to pre-settlement lodgement checks, reducing post-settlement requisitions from land registries.
- Immediate distribution of the proceeds of sale post-settlement. If you are selling a property, you will receive cleared funds in your bank account within minutes of settlement, rather than waiting days for your bank to clear a bank cheque.
Optimum Lawyers is registered with PEXA and is able to complete your conveyance electronically, whether you are a Vendor or a Purchaser. We have already settled many matters through PEXA in NSW, QLD and VIC.
We are here to help and are more than happy to answer any questions you have about e-conveyancing or conveyancing in general. If you would like to know more about what e-conveyancing would mean for you at your next property sale or purchase, please feel free to contact us today.