What is Electronic Conveyancing?
To put it simply, the term “electronic conveyancing” refers to a conveyancing transaction settled electronically through the platform provided by Property Exchange Australia Limited (PEXA). In the modern world of technology, we can do just about anything online and property transfer documents are no exception. As we move towards a paperless digital future, we are excited about the option to electronically prepare and lodge registry instruments giving you access to real time lodgement and payment.
The financial settlement is also carried out in real time, something the industry has lacked and had previously left the industry in the dark ages.
Here are some facts about electronic conveyancing to get you up to speed with what is possible and available online for your future property transfer.
Name: Electronic Conveyancing or e-conveyancing
Platform: Property Exchange Australia (PEXA)
What it is: A virtual settlement room for agreements, gathering electronic signatures, disbursement of settlement monies and immediate transfer of title
What can you use it for: Preparation and signing of settlement and registration certificate for transfer, mortgage and release or discharge of mortgage, caveat.
The representatives of the parties and their financiers participate in an electronic workspace, where:
- registry instruments are prepared and electronically signed (transfer, mortgage, discharge/release of mortgage);
- duty may be paid as a settlement disbursement;
- the balance of the purchase money and its disbursement are agreed;
- the documents to be lodged for registration are checked pre-settlement at the Land Titles Office(LTO);
- at the agreed settlement date and time, provided the documents are in order for registration, the balance of purchase money is paid and proceeds of settlement are disbursed; and
- the relevant registry instruments are electronically lodged for registration (which usually follows that same day).
Electronic 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.
How Electronic Conveyancing Works
PEXA is an electronic platform that operates as a virtual meeting room for settlement. It means that your conveyancer does not have to physically attend a meeting for settlement. It also eliminates the need for bank cheques and the swapping of paper documentation on the day.
All the data in PEXA is pre-populated and verified against the land registry system, which eliminates issues of misspelt names, mismatched bank cheques and human error that can cause delays and faults in settlement success.
The Electronic Lodgement Network (ELN) that processes the digital documents is also able to provide electronic funds transfers. With a direct connection to all major Australian banks, it means fewer delays and the handy option to bypass the hassle of bank cheques. This means you get your money faster as a seller.
This virtual workspace enables representatives of a settlement to meet from any location along with their financiers, to sort out the balance, set a date and time for settlement and prepare documentation. Having a virtual workspace means a conveyancer who is registered in NSW can settle any property in NSW, without physically being where you are, which gives you greater flexibility when choosing your conveyancer.
Once completed, the registry instruments are lodged at Land Registry Services (LRS), which further eliminates delays and hassles down the line as any errors can be addressed before settlement. This also avoids postal delays.
On the due date and time for settlement, the settlement funds are disbursed electronically and the registry instruments are electronically lodged for registration. That means fewer errors, faster lodgement times and immediate availability of both funds and the name on the title.
Because all the identification and verification documents are sorted well before the settlement, it means there are far less risks and fewer hiccups.
Who is Electronic Conveyancing for?
Electronic conveyancing is suitable for the following people and scenarios:
- Interstate buyers who want to use their current conveyance agent.
- People who are simultaneously buying and selling properties and need the assurance of timely and accurate settlement.
- Businesses making multiple settlements at the same time.
- Settlements that are time sensitive.
- People who need immediate access to funds.
- People who need an instant Title listing.
- Those looking for safe, fast and accurate lodgement of registry instruments.
- AND anyone that values time, efficiency and the safest security measures available to them for their important conveyancing transaction.
The Rules of Electronic Conveyancing
All parties must be willing and able to lodge the registration electronically. Unfortunately, despite the overwhelming support by industry groups for e-conveyancing, not all conveyancers and solicitors are shifting to the new way of e-conveyancing. It is expected by mid 2019 e-conveyancing will be compulsory.
You must complete e-conveyancing through a conveyance practitioner with a PEXA registration and Digital Signing Certificate. Your representative is able to gain access to the PEXA platform from their office. They will arrange a settlement meeting online with other parties, sign digitally on your behalf and handle negotiations.
All the details of the settlement will be made available online for checking and tracking. The rules for each state and territory are defined by the Model Participation Rules (MPR) which have been specifically drafted for electronic conveyancing.
The MPR operates under Australian National Law. The rules are updated and revisited regularly. You can see the current MPR and recent amendments at the following website: https://www.arnecc.gov.au/publications/model_participation_rules
What you need for Electronic Conveyancing
As the client, you will first need to authorise the online transactions. The client authorisation form is provided in the MPR (Schedule 4), expressly authorises the signing of documents on your behalf, the lodgement of documents such as transfers for registration, the financial settlement of the conveyance and anything else necessary to complete the transaction. Please be certain you are willing to authorise an online signing by an appointed practitioner, it is a non-negotiable step.
It is essential that you adequately establish your identity. The Verification of Identity (VOI) Standard in the MPR (Schedule 8) will be sure that identification compliances have been met.
The verification may be undertaken by our office or may be provided by a third party (Subscriber Agent). There are a number of commercial providers of verification of identity services.
The Digital Signature
In the virtual settlement room, digital signatures are used to sign the required documents to finalise the transaction. All documents, including the digital certificate, have secure passwords in place for access and editing.
What are the benefits of Electrionic Conveyancing?
There are many benefits to e-conveyancing that include:
- Higher security and reduced risk of identity fraud
- Quick lodgement times (registration usually occurring on the same day as settlement) eliminating to missed registration or lost documents
- Less admin and manual input (eliminates most faults and errors)
- Ability to process financial settlements, caveats and withdrawals, mortgages and discharges, and land transfers
- Online payout figures
- Funds are immediately available
- Known readiness of other parties
- Greater certainty of settlement success
- No need for bank cheques
- No expenses for travel
- Updates on title activity after exchange
- Access to pre-settlement lodgement checks (LRS)
- Real time lodgement and settlement
At Towns Conveyancing Services, we are at the cutting edge of electronic conveyancing, completing numerous e-conveyancing settlements and continuing to do so. Kristi Towns has been awarded PEXA Certification for completion of the required modules of understanding and competency in e-conveyancing.
If you would like to know more about what electronic conveyancing would mean for you at your next property sale or purchase, please contact us today as we would love to go over the details and options with you.