Electronic Conveyancing in NSW – what’s the latest?
It has now been over 4 months since e-conveyancing was mandated for certain transactions within NSW, including all standalone caveats, transfers, mortgages and discharge of mortgages. Despite some initial resistance and teething problems, most practitioners in the wider community have been part of a general push towards e-conveyancing, as the 'word on the street' is that all transactions will be required to take place on the e-platform by 1 July 2019.
Stay tuned, as it will be interesting to see how that plays out over the next few months...
In line with this widespread push towards e-conveyancing, Coleman Greig has put together the following information to serve as a general update, and to provide our readers with some insight into the path forward.
Current Situation and Upcoming Deadlines - Numbers, Dates and Facts:
- In October 2018, it was intended for all paper Certificate of Titles with Authorised Deposit-taking Institutions (i.e. most recognised banks) to be replaced with e-Titles.
- By 1 July 2019, all transfers, mortgages and discharges of mortgages are expected to be undertaken electronically. Irrespective of whether one or more of these transactions affect the same folio of the Register, all dealings must be lodged electronically. The intention here is for all of the remaining paper Certificates of Title to be cancelled.
- Over 1.2 million transactions have now been processed through the PEXA platform successfully, and over $150 billion worth of property has been settled.
- Research conducted in 2017 estimated that 24% of all conveyancing transactions in NSW faced an issue during settlement. The electronic platform should see the elimination of those issues that can crop up during the paper settlement process.
- It was revealed by the NSW government that since 2013, the Registrar General paid approximately $2.1 million for the errors made in paper transactions, and $7.3 million for fraud. The electronic platform will ensure that there is far less room for human error.
- The new e-system enables the parties to view every stage of the transaction on their electronic workspace. Vendors receive funds within half an hour, whilst those purchasing property become the registered owner of such property at settlement itself.
- Purchasers are now able to lodge documents online 24/7, with both the settlements and lodgements occurring simultaneously. This both eliminates settlement fees and reduces the risk of fraud, whilst at the same time fostering higher levels of transparency and co-ordination between the parties.
Causes for Concern
Readers may well have seen media reports relating to the fraudsters who stole settlement funds from the proceeds of a transaction made via the PEXA platform. This fraud came about as a result of a conveyancer's email with the client's bank account details being intercepted and altered, thereby redistributing the funds to the fraudster's bank account. While the blame cannot be attributed to the electronic platform itself, it did serve as a reminder of the types of issues that have the potential to arise as a result of working in an electronic world.
Other technical shortcomings include:
- There have been numerous complaints of glitches and crashing of the PEXA Platform. Moreover, many solicitors claim that PEXA can be slightly inefficient in that it does not allow bulk signatures for electronic documents.
- The ARNECC's role as the regulator of the industry cannot be completely assured, and there are still concerns about the ownership of the crucial data set of millions of consumers.
The Way Ahead
Going paperless, and transitioning towards to the electronic system is undoubtedly inevitable. In order to make this transition successful, various steps are being taken, such as:
- The State governments will be launching a review of the e-conveyancing system's operating requirements and rules of participation. The competition watchdog ACCC has also been called on to guide the ARNECC.
- PEXA has implemented strict measures in order to secure the e-conveyancing process and re-instil confidence in its users. Some of these measures include:
a) Improving PEXAs data management system and data security.
b) Changes will be made to the PEXA system to allow for new users to be created in an inactive status, meaning that only PEXA will be authorized to enable them.
c) The Australian Institute of Conveyancers' NSW division is developing a formal two-factor authentication system to replace the manual one.
d) Reports of fraud made to PEXA are to be recorded and escalated internally according to established procedures.
Above all, Coleman Greig believes that a collective co-ordinated approach from all stakeholders will lead to a successful transition towards e-conveyancing.
Here at Coleman Greig, we have a dedicated and experienced team of conveyancers and property lawyers who can assist you throughout each step of your property transaction. If you have a query relating to any of the information in this piece, or would like to speak with one of our licensed conveyancers with regard to the move towards e-conveyancing, please don't hesitate to get in touch: