Client Update: Status of electronic conveyancing
29 November 2013
In brief: Since the passing of the original electronic conveyancing legislation in NSW, various states and industry participants have moved towards a national electronic conveyancing process. Partner Victoria Holthouse (view CV) and Senior Associate Sharon Heffernan look at the status of the national roll-out.
- The status of the roll-out of electronic conveyancing
- Changes to the conveyancing process
The National e-Conveyancing Development Limited (NECDL) was formed in 2010, to develop and deliver a national electronic conveyancing system that will allow:
- accredited parties involved in a transaction to view and complete the documents required to complete a property transaction;
- the settlement of financial transactions, including distribution of settlement monies and third-party disbursements such as stamp duty; and
- the lodgement of land title instruments for registration by the relevant state or territory land registry,
all in an electronic environment.
Electronic conveyancing will be conducted using the purpose-built Property Exchange Australia (PEXA) platform.
At the end of 2012, following the passing of the Electronic Conveyancing (Adoption of National Law) Act 2012 (NSW), we reported on the move towards a national electronic conveyancing process (see Client Update: Setting up a national electronic conveyancing platform.) Since that time, the Electronic Conveyancing National Law has been adopted by Victoria and Queensland, and CBA, NAB, ANZ, Land Victoria and LPI NSW have joined PEXA.
It is anticipated that the other states will either adopt the Electronic Conveyancing National Law or enact corresponding legislation.
Electronic conveyancing is being rolled out in two main releases. During Release 1, which took place in Q2 2013, select land registries (Land Victoria and LPI NSW) and financial institutions (CBA, NAB and ANZ) were invited to join PEXA. Those parties can now transact standalone mortgages, discharges of mortgage and refinancings on PEXA.
On 18 June 2013, Land Victoria successfully completed its first transaction, a discharge of mortgage, through PEXA. On 8 October 2013, the first electronically lodged dealing in NSW, a discharge of mortgage, was registered by LPI NSW through PEXA.
PEXA expects that the Queensland land registry and Westpac will join in December 2013 and the Western Australian land registry will join by Q1 2014.
During Release 2 (scheduled for Q3 2014), legal practitioners and conveyancers will be invited to join PEXA. Legal practitioners will be able to carry out and lodge caveats and notices, transfers and settlements on PEXA, as well as the Release 1 transactions. There will be no periodic subscription fee for legal practitioners to join PEXA, but fees will be charged per use, although at the moment NECDL is still determining what those fees will be. Obviously, the fee per use will need to be balanced against the cost savings of using PEXA: for example, there will no longer be the need to have settlement agents physically attend settlements or the need to pay for bank cheques. PEXA expects that there should also be a reduction in the amount of time spent in organising settlement and distributing settlement monies.
The use of electronic conveyancing will not be mandatory and parties may continue to use the traditional paper method of conveyancing. In order to use PEXA, all parties to the transaction will need to be PEXA subscribers.
Electing to use PEXA to carry out a conveyance will require changes to the usual conveyancing process, including:
- Digital signing of documents on behalf of the client to use PEXA, a lawyer is required to digitally sign the transfer and to release settlement monies on behalf of their client. The client will be required to sign a client authorisation form at the start of the transaction.
- Verification of identity a lawyer will be required to take reasonable steps to verify the identity of their client.
- Settling monies electronically PEXA will enable the financial settlement of electronic conveyancing transactions. Settlement monies can be disbursed to the client account from PEXA immediately at settlement.
- Electronic certificate of title following an electronic conveyance, there will be an electronic title and the hard copy certificate of title will no longer exist.
- Victoria HolthousePartner,
Ph: +61 2 9230 4303
- John BeckinsalePartner,
Ph: +61 7 3334 3520
- David McLeishPartner,
Ph: +61 3 9613 8954
- Michael GravesPartner,
Ph: +61 3 9613 8814
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