The Future of Conveyancing
Electronic settlements through Property Exchange Australia (PEXA) are transforming the property industry in Australia, making property settlements faster, safer and more efficient. PEXA is Australia’s online property exchange network and allows members, such as lawyers, conveyancers and financial institutions, to complete, verify and lodge documents on behalf of buyers and sellers online and complete financial settlements electronically.
While all Australian Governments were involved in the design and implementation of the national e-conveyancing platform, e-conveyancing is currently in operation in five states (Queensland, New South Wales, Victoria, South Australia and Western Australia) and has been compulsory in Western Australia since December 2017. New South Wales and Victoria have mandated that all property settlements must be managed online from July 2019. While Queensland is yet to announce a compulsory transition to e-conveyancing, DSS Law has been successfully managing electronic settlements since January 2018.
The strong take-up of PEXA settlements nation-wide is indicative of the wide felt benefits e-conveyancing offers buyers and sellers, lawyers and conveyancers, property developers and financial institutions. The following overview outlines some of the main benefits DSS Law has been able to pass on to our clients since transitioning to e-conveyancing.
Manual conveyancing processes often involve a range of paper documents requiring signatures from both the buyer and seller and rely on postal delivery and physical meetings to have these documents executed and exchanged. Further, a traditional settlement requires the arrangement of a suitable time for four or more separate parties to physically attend a meeting at a settlement agency to exchange paperwork and bank cheques in order for a property to legally change hands.
E-conveyancing minimises the manual process and paperwork of traditional conveyancing and property settlements and eliminates many of the risks involved such as human error (for example, misplaced or incorrectly signed documents) and delays (such as delivery errors, financial issues or hold ups at the Land Titles Office). The PEXA system allows settlements to be made entirely online reducing the need for physical documentation and face-to-face meetings as practitioners are able to electronically sign documents and cheques on behalf of clients and no longer need to travel to attend settlement or visit a bank or financial institution to collect and process cheques.
The four major banks ANZ, Westpac, Commonwealth Bank and NAB, as well as over 80 financial institutions, have all signed on to use PEXA for electronic settlements giving users the choice and convenience of using their preferred financial body. Funds are able to be transferred online and are processed as cleared funds so sellers have immediate access to the purchase money and buyers save money and time as bank cheques are no longer required.
Property title can also be lodged electronically which mitigates the risk of delay at the Land Titles Office and allows for immediate registration of ownership documents, removing the uncertainty buyers often face while waiting for the lodgement of documents to occur (which can often stretch over weeks).
PEXA performs routine lodgement verifications on all documents within a lodgement case to minimise any risk of lodgement failure at settlement and participants can view the progress of their transaction online. Once a settlement date and time has been decided and the parties have all certified the documents and financial calculations, PEXA will automatically lodge documents with the Land Registry, disburse transfer duty as required, exchange loan funding and pay other third party beneficiaries (if required).
While PEXA does charge a nominal fee for each transaction, this fee is generally off-set by reduced conveyancing costs brought about by eliminating the need for additional searches, settlement clerks, travel and bank cheques. It is also particularly beneficial in circumstances where there may be a related transaction, such as a re-finance where the parties aren’t physically in the same location. Being able to complete settlement online removes geographical barriers and ensures completion of settlement is fast, efficient and certain.
Greater transparency for all parties
The PEXA platform provides greater transparency for all parties to a transaction through digital scheduling of key steps and clear communication of each party’s requirements. Personalised checklists of tasks and information on each step of the process are given to the relevant parties through a customised dashboard and users can receive instant alerts as the settlement progresses via SMS or email. Clients are also able to track their transaction with a free settlement app which navigates the process with customised checklists and real-time updates. The app keeps buyers and sellers informed throughout the settlement process reducing the need for clients to call or email their property lawyer or conveyancer as they have direct access to the transaction. While electronic conveyancing provides greater confidence in the process, at DSS Law we still monitor each electronic settlement as it takes place to ensure that there are no issues.
Users of electronic conveyancing can enjoy peace of mind that their online transactions are safe and secure through PEXA’s stringent security measures. PEXA operates under a national framework developed by the Australian Registrars’ National Electronic Conveyancing Council and includes a participation agreement, verification of identity and digital certification process. All PEXA subscribers must have their identification verified during the registration process before any action can be undertaken.
Clients must also have their identity confirmed either by a PEXA member or by a service provider who is a specialist in this area. Buyers and sellers must sign a client authorisation form enabling their lawyer or conveyancer to complete all other document signing electronically on their behalf. Electronic signatures reduce the risk of error from missing or mismatched signatures. There is a digital signature certification process that must be completed to allow PEXA to use digital signing rights for online transactions. Further, with a PEXA settlement, the documents are lodged at the titles registry at the same time as the settlement, which means that there can be no requisitions from errors in documents, resulting in a purchase not being properly secured.
While the PEXA platform offers a sophisticated and easy-to-use online tool to assist with the transfer of a property, contract advice and negotiation will still be required by purchasers and sellers during residential property transfers. It is always recommended that both buyers and sellers seek legal advice to protect their interests before undertaking a property transaction. DSS Law’s property law team are available to assist you through every step of the conveyancing process throughout Australia.
DSS Law insight articles are intended to provide commentary and general information. They should not be relied upon as formal legal advice. If you would like specific advice relating to this topic, please contact DSS Law on 1300 DSS LAW or email@example.com.