Have you bought a property that was settled using Electronic Conveyancing (e-conveyancing). This system of transferring real property has been in place for some time now and the fundamental changes are starting to take effect. These changes not only affect how practitioners such as conveyancers and solicitors carry out transactions on their clients’ behalf but they impact on all people who buy, sell, develop and mortgage real estate which is to say just about everybody.
It has been an exciting time so far with many benefits to all involved and as one of the early adopters it has been a great experience to be involved with the PEXA staff. The video above is a review of 2017 by PEXA and Denise McKay from our office is featured in this video as well.
THE BENEFITS OF USING E-CONVEYANCING:
- Streamlines existing processes;
- Strengthen the integrity of conveyancing practices in general.
- Keep pace with e-commerce and other developments in the online business world
- The Purchaser gets the security of Title Registration taking place within 48 hours of settlement
- The vendor gets cleared funds almost immediately
- No more bank cheques and waiting for clearance
- No more delays and waiting in long lines at settlement for the conveyancers
However, while the basics of conveyancing are still the same as they used to be, the responsibility is now on the conveyancer to have all the right documentation in place. It also means that we get to know our clients more and build lasting relationships. This can only see that as a positive for all involved.
E-conveyancing not only has changed how practitioners such as solicitors and conveyancers carry out these transactions on their clients’ behalf but impact on all people who buy, sell, develop and mortgage real estate which is to say just about everybody.
TOP 6 KEY THINGS YOU NEED TO KNOW
Now that e-conveyancing has replaced the old paper-based system, there are some points that you should be aware about:
1. No More Duplicate Certificates of Title
The biggest change for people to get their heads around is that the Lands Titles Office will no longer issue duplicate Certificates of Title (“deeds”) or require titles to be produced at settlement when transferring or dealing with the title. There is a Confirmation of Registration that takes place of the Certificate of Title and this is available to the lodging party (the party lodging the last document lodged in the transaction) when the transfer has been registered. A Register Search can also be ordered after settlement to confirm the details of the registered proprietor of the property
2. Verification of Identity
Verification of Identity or (“VOI”) requires that there be a face-to-face meeting between the person being identified and the Verifier, or their agent. Agents can be lawyers, conveyancers, authorised deposit-taking institutions (e.g. banks) or other reputable and competent persons who have the required level of insurance. Original identification documents must be produced to the Verifier at the meeting. This is similar to the bank’s 100-point check where a passport, driver’s licence, or proof of age card (photo ID) can be produced together with other identifying documents. This will enable the Verifier to identify a person whether known to them or not. The image on the photo ID must of course be compared carefully with the face of the person attending the meeting.
All methods of identification will require at least two forms of documentary identification and where no photo ID is available, other forms of identification may suffice.
Anyone transacting in land in South Australia must be able to have their identity verified to safeguard other consumers from fraud. The VOI process has been in place since April 2014 and apart from a few minor changes, practitioners and investors are now well acquainted with the requirements and they make sense in this increasingly complicated world where there is a greater risk of identity fraud.
If you are unable to get to your local conveyancer, then the services of a Verifiers Agent can be arranged. Australia Post is our preferred Verifier Agent and we have used their services effectively over the past few years. Instead of attending your conveyancer’s office, you can have your identity verified at your local post office!
Original identification documents must be produced to the Verifier at the meeting. This will enable the Verifier to identify a person whether known to them or not. The image on the photo ID must of course be compared carefully with the face of the person attending the meeting.
Click on the links below for both the Client Information Sheet and the Australia Post VOI web page if you would prefer to use their services.
3. Client Authorisation
In South Australia, a Client Authorisation is a document that enables you, as the client, to authorise a conveyancer to act on your behalf in a conveyancing transaction such as a sale or a purchase.
While acting on your behalf under a Client Authorisation a property conveyancer can:
- sign all land registry documents on your behalf;
- present these documents for lodgement with the Land Registry; and
- authorise or complete any associated financial aspects of the transaction.
The Client Authorisation clearly sets out the details of the Authorisation and the completed form must be retained by the conveyancer, as supporting evidence of authority for the transaction.
This document is now compulsory in both the paper and electronic settlement process and is required to give the authority to sign all documents on your behalf.
When is a client authorisation required?
Whenever your conveyancer represents you as their client in a conveyancing transaction.
How is a client authorisation completed?
A Client Authorisation is completed and signed by you as the client, or by your attorney or representative, and your conveyancer will also need to sign the form to certify that reasonable steps were taken to ensure the form was signed by you or your attorney or representative.
Ideally the VOI would be completed at the same time as signing the Client Authorisation. However, there may be times where this will not be able to occur simultaneously and, if so, reasonable steps must be taken to ensure that the Client Authorisation has been signed by you or your attorney or representative. This can be done by checking the verification of identity supporting documentation and ensuring it is the same person signing.
Client Authorisations can be given:
- for a specific transaction or transactions.
- as a standing authority, either until a specified date or until it is revoked; or
- for a batch of transactions.
4. Verification of Authority
The onus is on the conveyancer to not only comply with the VOI guidelines to identify you as the relevant party to the transaction, but to verify their authority to sign the land instruments to give effect to the transaction (called Verification of Authorisation guidelines) as well.
These guidelines include gathering other information and documents that provide evidence you have the right to buy or sell the property. This could be, for example, a council rates notice identifying you as the owner of a property you’re selling, or your formal finance approval documentation if you’re buying a property. The conveyancer has the additional responsibility to certify that the documentation is correct to ensure the integrity of the whole process of conveyancing in both the paper and the digital workspace.
5. Electronic Lodgement Network Operator (“ELNO”)
Property Exchange Australia (“PEXA”) is the main ELNO in South Australia that removes the need to physically attend settlement by allowing Land Registries, financial institutions and practitioners to transact together online. It is similar to the Australian Stock Exchange (ASX) but it deals with property rather than shares.
All ELNO’s will provide many efficiencies to the conveyancing industry by reducing the time spent preparing instruments, removing the need to attend settlement, and using technology to greatly reduce the prevalence of errors and failures in land transactions. The ELNO supports the exchange of property through the ability to perform lodgements and property settlements online in a simple transaction. This includes new mortgages, mortgage discharges, transfers, settlements, refinancing, caveats, and notices all in one easy to use electronic platform.
Once the data has been entered into the ELNO workspace and the settlement date and time is reached, the ELNO will automatically lodge documents with the Land Registry, exchange loan funds and pay stamp duty and other third-party beneficiaries, meaning no more bank cheques and no more physical attendance is required at settlement.
PEXA is regularly updating its systems to bring in more documents and tools to assist in the e-conveyancing process and they are well on the way to being able to capture all transactions in the electronic workspace. SYMPLI is the second ELNO currently getting documents ready for the e-conveyancing process in the future.
Regardless of what you may think, e-conveyancing is here to stay which we believe is a good thing for our industry.
6. Title Watch
Title Watch monitors certain activity against a selected Certificate of Title. When an activity is detected, an email and/or SMS notification will be sent to the Title Watch subscriber’s recorded email address and mobile phone number, this is usually your conveyancer.
Activities that will trigger an alert include the following:
- Order of a Property Interest Report or Form 1 Product
- Lodgement of a Priority Notice
- Lodgement of a dealing (e.g., Transfer, Caveat or Mortgage etc.)
- Cancellation and issue of a new Certificate of Title. (e.g., Land Division and amalgamation of titles)
This will mean that your conveyancer can create a Title Watch search on your behalf, which can be a very useful tool in the purchase of an apartment, for example. These are generally long settlements which require a subdivision to occur prior to settlement. The Title Watch service will enable your conveyancer to keep up to date and the early notice will assist with ensuring that everything is ready for the settlement.
Along with VOI, Title Watch has been introduced as a service to minimise the risk of fraud. It is one of the many new processes being implemented for electronic conveyancing and it is certainly worth talking to your conveyancer about how it can benefit you!
EVERYONE WILL BENEFIT
Electronic conveyancing is here, and any prudent and forward-thinking professional, consumer, or investor will realise that everyone will benefit. These new processes are required to maintain the efficiency and integrity of the conveyancing process in our ever-changing world. We are sure that more changes will be brought into the conveyancing industry and we at McKay Business Services embrace the changes that make our industry a unique and interesting industry to be involved in.
If you would like more information, call 8333 3525 and speak to one of our conveyancers who are in the know and are more than happy to answer your questions!
The team at McKay Business Services are all members of the AICSA and are proud Adelaide conveyancers