There has been much in the news recently about Australia’s electronic conveyancing (e-conveyancing) roll out. Below we share insights into implementation of e-conveyancing.
What is e-conveyancing?
- Property Exchange Australia (PEXA) (owned by government agencies and a number of financial institutions), will in due course enable lawyers, licenced conveyancers, regulated financiers and government authorities (called ‘subscribers’) to lodge data with the titles offices in each Australian state and territory electronically, replacing paper documents.
- E-conveyancing is essentially a process for settlement, stamping and lodgement of property transactions electronically in a paperless environment.
- Functionally e-conveyancing in some ways can be better described as “e-settlements”. The whole conveyancing transaction will not be electronic, only the settlement part including the electronic transfer of monies. This will mean that the old practice of the parties’ representatives each physically attending a settlement where bank cheques and documents are exchanged will no longer be required.
- National laws for e-conveyancing are in place and “model participation rules” have been introduced which set out protocols for:
- creating documents in an electronic environment
- settling transactions in real time and for value
- arranging for stamp duty to be paid
- lodging and registering documents at the applicable titles offices
- simultaneous notification to authorities like council, water and land tax
- Lawyers, conveyancers, financial institutions and government authorities need to sign a participation agreement to be authorised to join in e-conveyancing.
- The four parties usually involved in a conveyancing transaction (vendor outgoing, bank, purchaser and incoming bank) will need to participate and be authorised to use the system before a transaction can be completed electronically.
- E-conveyancing will be introduced in various states and territories progressively over the next 2 years.
- New South Wales is the first state in which fully functional e-conveyancing (lodgement of documents and complete financial settlement electronically) is being trialled in a few select locations.
- In early 2015 Victoria will go “live” with fully functional e-conveyancing. Queensland will then follow and other states and territories progressively after that.
- Trust accounts need to be established and relationships between participants and PEXA documented. IT systems need to link one with the other and authority needs to be given to PEXA to debit the bank accounts of participants.
- All participants need to be verified and identified and give authority to transact. New verification of identity requirements (VOI) are being introduced progressively and can include production of a passport and a drivers licence or other appropriate forms of identification.
- The old “manual” conveyancing system will continue to be available for the time being and apply particularly where the representative of one or other party is not a PEXA subscriber.
Hunt & Hunt and e-conveyancing
- Hunt & Hunt has recently signed a participation agreement with PEXA and we are investigating ways of satisfying the new requirements for VOI.
- Hunt & Hunt clients, whether developers, financial institutions or private clients will benefit from our close relationship with PEXA and understanding of the new e-conveyancing regime. We are participating in the piloting of the scheme in Victoria.