e-Conveyancing

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An electronic system of conveyancing started to operate in Australia in early 2015. This article sets out the key concepts of electronic conveyancing and what this new system will mean for you.

 

 

A. What is e-Conveyancing?

Electronic conveyancing (or e-conveyancing) refers to a conveyancing transaction (which can be either a sale or a purchase of land) where your lawyer or licensed conveyancer has chosen to settle your transaction electronically.

 

The system is not compulsory which means that the current paper method of conveyancing will continue to operate alongside the new electronic system. In fact, electronic conveyancing does not cover each step in a conveyancing transaction; it only comes in at the point of preparation of the Transfer.

 

As such, all the steps prior to the Transfer such as preparation of the Contract, exchange of Contract and Requisitions on Title all continue to be paper-based.

 

B. How will the electronic system operate?

PEXA is Australia’s electronic conveyancing system. PEXA is both the company providing the electronic platform and the electronic platform system itself.

 

The State Governments of Victoria, New South Wales, Queensland and Western Australia together with the major banks (ANZ, Commonwealth, National Australia Bank, Westpac and Macquarie Capital) are the principal shareholders of the company Property Exchange Australia Limited (“PEXA” for short).

 

Any lawyer or licensed conveyancer wishing to join the electronic conveyancing system must firstly register with PEXA. The transactions then take place electronically on the PEXA platform. Land registries of each participating State have been incorporated on the PEXA platform by effect of the ECNL.

 

C. What will change with e-Conveyancing?

 

C.1. Client Authorisation (CA)

The first step for the lawyer or licensed conveyancer who has opted for e-Conveyancing is to enter into a Client Authorisation with you.

 

As there is no such document under paper conveyancing, you will thereby be immediately alerted that your practitioner has switched to electronic conveyancing when you are asked to enter into a Client Authorisation (CA).

 

The Client Authorisation form (or CA form) is mandated by the legislation. It follows that a practitioner cannot opt out of using this form which is signed by you and the practitioner. This two-page form is very important and you should read it carefully before signing it. Through the CA form you authorise your lawyer or licensed conveyancer to do the following for you:

  • Sign documents on your behalf as required for the conveyancing transaction type;
  • Submit or authorise submission of documents for lodgment with the relevant land registry;
  • Authorise any financial settlement involved in the conveyancing transaction; and
  • Do anything else necessary to complete the conveyancing transaction.

 

The conveyancing transaction types are as follows:

  • Transfer
  • Mortgage
  • Caveat
  • Priority/Settlement Notice
  • Discharge/Release of Mortgage
  • Withdrawal of Caveat
  • Other (as specified in your instructions)

 

By signing the CA form you are also certifying:

  • That you are the Client (or the Client’s Agent where applicable);
  • That you have the legal authority to instruct the lawyer or licensed conveyancer in relation to the conveyancing transaction; and
  • Where you are acting as the Client’s Agent, that you have no notice of the revocation of your authority to act on behalf of the Client.

 

C.2. Verification of Identity (VOI)

The second step for the lawyer or licensed conveyancer who has opted for e-Conveyancing is to verify your identity which must be done at the time of entering into a Client Authorisation with you.

 

This Verification of Identity (or VOI) process is more complex than the current identification that is required for stamp duty purposes when purchasing property, and your lawyer or licensed conveyancer will guide you in regard to meeting these VOI requirements.

 

You should be aware of the following:

  • VOI is compulsory whether you are a vendor or a purchaser as it underpins the Client Authorisation form that you sign which, in turn, supports the econveyancing system;
  • VOI must be conducted during a face-to-face inperson interview between yourself and your practitioner; as such, you will no longer be able to merely submit by mail or email copies of original documents which have been certified by a justice of the peace (for example);
  • You will need to produce original documents from one of the categories set out in the Rules (your practitioner will advise you what is required in relation to your circumstances);
  • Where a Client Authorisation is to be executed by a company, your practitioner is required to:
    1. confirm the existence and identity of the company by conducting an ASIC (Australian Securities and Investments Commission) company search; and
    2. take reasonable steps to establish who is authorised to sign or witness the affixing of the seal on behalf of the company; and
    3. verify the identity of the individual or individuals signing or affixing the seal on behalf of the company in accordance with the VOI requirements; in other words, both the company itself and the persons signing the CA on its behalf must be identified in accordance with the Rules.

 

C.3. Digital Signature

Documents such as the Transfer and the financial settlement statement are digitally signed using a digital certificate. This is a USB device which has been encrypted with electronic data intended for the exclusive use of a particular person within the firm. You will still need to sign the Contract for Sale in readiness for exchange but beyond that point, after you have entered into a CA, your lawyer or licensed conveyancer will digitally sign all other documents for you including the Transfer.

 

Under the electronic conveyancing system, the practitioner has the authority to digitally sign the Transfer for a vendor provided that the CA has been signed by both the vendor and the practitioner.

 

C.4. Settlement

Where you are purchasing property, and your lawyer or licensed conveyancer has joined e-conveyancing, you will no longer be able to provide additional funds for settlement by providing bank cheques for settlement to your practitioner.

 

All funds for settlement must be provided electronically through the electronic workspace in PEXA. Accordingly, your practitioner will request you to deposit your funds for settlement to a source account (in most cases this will be your practitioner’s firm’s trust account) three days prior to settlement.

 

This is because settlement can only occur on cleared funds (banks take three business days to clear funds). It follows that where you are selling property, your funds will be immediately available after electronic settlement.

 

Comasters continues to perform paper-based conveyancing and has joined PEXA for electronic conveyancing transactions. As such, Comasters is able to assist you with any of your conveyancing transactions including where the practitioner on the other side of the transaction has chosen electronic conveyancing for the transaction.

© Comasters November 2015

 

Important: This is not advice. Clients should not act solely on the basis of the material contained in this paper. Our formal advice should be sought before acting on any aspect of the above information.