IN 2008, THE AUSTRALIAN COUNCIL OF AUSTRALIAN GOVERNMENTS (COAG) prioritised the implementation of a national electronic Conveyancing (e-Conveyancing) system. The system will render all property transfers paperless and introduce a uniform national scheme.
Property Exchange Australia Ltd (PEXA) was created in 2010 to provide online infrastructure. PEXA owns the rights to all previous e-Conveyancing software and will create a single point of access across all jurisdictions.
The system is now open to all states and territories to adopt and many have already begun the move to e-Conveyancing.
Key Benefits Of e-Conveyancing
E-Conveyancing has the potential to benefit investors in a number of ways, such as:
- Increased efficiency
- Savings in both time and cost
- Greater levels of transparency and increased convenience
E-Conveyancing will also aid the transfer of properties across jurisdictions, as users will be able to utilise a single, uniform system.
The move to e-Conveyancing will impact stakeholders (ie. financial institutions and professional service advisors such as lawyers) in several ways.
Firstly, the system requires a move to paperless titles and will only be accessible where all parties are members of PEXA. Users must enter into an agreement with PEXA in order to access the system and must adopt their Model Operating Requirements (Requirements).
The Requirements laid out oblige all users to take reasonable steps to verify the identity of their clients. This is a potentially onerous responsibility, depending on the identity of and relationship with a client.
Users will also be required to sign documents on behalf of their clients, in a similar manner to a Power of Attorney. Clients will be required to complete a client authorisation form before this can occur, in the exact format dictated by the Requirements.
Investors will need to take care to comply with and keep up to date with the Requirements, to ensure that their client authorisations are valid.
The Victorian Example
Across Australia, there is now a firm trend towards converting to an e-Conveyancing system. A PEXA trial is already underway in New South Wales, and Queensland has begun to conduct a limited range of transactions by financial institutions electronically.
Western Australia is the latest state to pass e-Conveyancing laws, enacting the Electronic Conveyancing Act 2014 (WA).
And in Victoria, the Electronic Conveyancing (Adoption of National Law) Act 2013 was enacted in 2013 to facilitate the introduction of e-Conveyancing.
PEXA will be trialled in Victoria from October 2014 and Land Titles Victoria has signalled its intention to align all paper and electronic Conveyancing by 1 January 2015.
Moving Forward …
As indicated in a discussion paper released by Land Titles in 2013, a key initiative moving forward is the phasing out of paper certificates of titles.
In October 2014, amendments were made to the Transfer of Land Act 1958 (Vic) to enable this transition. Registrars now have the power to cease issuing paper certificates of title and to declare that those issued have no effect from a specified date.
As other jurisdictions progress with similar amendments, it seems the move towards e-Conveyancing is now unstoppable.
Bottom Line: Investors, and in particular their professional advisors, should remain conscious of their changing obligations as the system is implemented and seek to utilise the potential benefits wherever possible.