Written by by Leah Hynes
Electronic Conveyancing (or e-Conveyancing as it is commonly referred too) has been implemented by the NSW Government over the course of the last 5 years. Secure online processes have been introduced and will replace the traditional manual and paper processes involved in current property transactions within NSW.
Currently there is only one electronic platform capable of undertaking the preparation and lodgement of electronic documents, together with processing and finalising Financial Settlements. The system is called ‘Property Exchange Australia Limited’ or PEXA in short.
THE E-CONVEYANCING TIMELINE
On 8 October 2013, e-Conveyancing commenced in NSW by inviting a small number of Banks to start transacting on PEXA by allowing the preparation and lodgement of Mortgages and Discharge of Mortgages to take place electronically. From September 2014, practitioners were also invited to join the PEXA platform to begin to lodge documents electronically.
From the end of 2014 until early 2016, PEXA used that time to review, obtain feedback and transform the platform into a more streamlined and user-friendly platform. NSW Land Registry Services, who were formerly known as Land & Property Information Services NSW, started informing practitioners of the upcoming mandate dates for electronic lodgement to take place in NSW.
From 28 February 2017, the NSW Government released the “100% digital timeline” and confirmed its plan for the introduction of paperless conveyancing, committing to a final date of 1 July 2019. It was advised that all paper transactions in NSW would be conducted electronically and all paper Certificates of Title would be phased out by this date.
In March 2018, all Refinances, standalone Mortgages and standalone Discharge of Mortgages were required to be lodged online. This was quickly followed by the requirement for all Caveats, Withdrawal of Caveats and standalone Transfers to be lodged online from 1 July 2018. One of the most important changes in this process was the elimination of the clients to sign the documents which are being lodged. Clients are now required to sign a Client Authorisation Form and have their Identity verified to allow a Practitioner to sign and lodge the documents electronically on behalf of the client.
We are advised that all Transfers, Mortgages, Discharge of Mortgages or any combinations of these which affect the same title, must be lodged electronically when signed on or after 1 July 2019, except when lodged with another dealing which cannot be lodged electronically. e.g. Transfer including Easement. All sales, purchases & refinances which include a financial settlement will be required to be processed online from 1 July 2019.
WHAT I NEED TO KNOW AS A CLIENT
Certificates of Title
A fundamental change in e-Conveyancing is the conversion of a paper Certificate of Title to an electronic Certificate of Title, also known as an e-CT. As mandated by the NSW Government, all Certificates of Title held by Mortgagees have now been converted to electronic Certificates of Title.
If you are holding an original Certificate of Title in safe keeping, it is important you provide this to your Solicitor or Conveyancer so that they can verify whether your Title has been converted to an e-CT. Once the conversion has taken place, a paper Certificate of Title holds no further value or use.
In e-Conveyancing, you will not be able to access the PEXA Platform to sign an instrument or document. Your practitioner will require you to sign a Client Authorisation Form which provides your Solicitor or Conveyancer with the necessary authority to sign the documents on your behalf. In addition to the Client Authorisation Form, you will be required to undertake a Verification of Identity.
Verification of Identity
In PEXA, it is the responsibility of the Practitioner to verify the identity of the clients they represent. This is an integral part of each e-Conveyancing transaction and is designed to ensure that all parties transacting in the Workspace can be confident that the person with whom they are dealing with is indeed the person entitled to deal with the subject property.
As e-CTs are now being issued by the NSW Land Registry Service, it is more important than ever to ensure the identity of the transacting parties. The paper Certificate of Title was traditionally known as the “Proof of Ownership”. Without a paper Certificate of Title to provide, it is necessary to further prove your entitlement to deal with the property in question.
Our office is equipped to undertake the Verification of Identity in house or even remotely if you are unable to attend the office. Our office is also registered with Australia Post, who are also able to undertake the Verification of Identity process with you and submit it directly to our office.
As a PEXA member, our Firm is required to meet and maintain a certain standard of Security when using the PEXA platform. PEXA uses an advanced encryption mechanism to protect all information and ensure the integrity and confidentiality of the data on the PEXA Platform.
Encryption is also used by all financial service providers to protect and maintain all customer data. Digital Certificates are used to electronically sign documents in PEXA on behalf of our clients and eliminate the need for a physical signature. Within Uther Webster & Evans, these Digital Certificates are only held by 3 Firm Directors and our 2 Licensed Conveyancers.
Benefits of e-Conveyancing
In 2017 the NSW Government commissioned an independent KPMG Report on the e-Conveyancing System in NSW to analyse the benefits of the platform. The Report found the main benefits to be noted as follows:-
- Time – Lodgement by way of PEXA saved practitioners an estimated 65%-70% of time spent following exchange of Contracts.
- Costs – Whilst there is a fee to use the PEXA platform, the use of the system avoids a number of costs which would otherwise be incurred such as final searches, settlement attendance (and reattendance) fees, bank cheque fees etc.
- Certainty – The platform has been found to provide enhanced productivity, reduced risk of failed or cancelled settlements, greater transparency between the parties and greater flexibility ensuring a smoother transaction and a higher Settlement completion rate.
- Access to Funds – Following Settlement, the funds are electronically transferred and received immediately by the Vendor, the Council, Sydney Water and any other accounts required to be paid.
- Risk – Immediate electronic lodgement of the Transfer of Land on Title following Settlement eliminates the risks associated with legal ownership and the risks involved in the current paper registration process.
The adoption and integration of e-Conveyancing has been a long process and we are still a year away from truly experiencing the full impact of this system. However, from our experience so far, the benefits are undeniable. The electronic process saves time, reduces the risk of fraud and forgery and allows our Property Team more time to focus on better quality client relationships through improved delivery of services.