A standardized national conveyancing system has been implemented in Australia to allow numerous property transactions to take place entirely paperless via the online platform Property Exchange Australia (PEXA). Paperless conveyancing is now available in all States and Territories except South Australia, which will join in 2016. The privately-owned PEXA is anticipated to handle 60 – 70% of all conveyancing transactions in Australia once fully-integrated into every day legal practice.
Continuing our commitment to take law out of the past and into the present and to provide our client’s with expedient legal service, JHK Legal has embraced this move towards electronic conveyancing and is in the process of incorporating PEXA into the firm’s practice. This exciting development will enable a client’s transaction to move expediently with less “hands on” involvement from the client.
PEXA creates a single land titles registration system. It is not replacing the current land law in Australia, rather it makes it possible to settle a conveyance of real property electronically and to lodge all required documents online with the land registry. Each State and Territory retains its existing real property laws but via new legislation in each state will be allowed to effect transfers online subject to the national Electronic Conveyancing National Law (ECNL) and associated regulations.
What does this mean for clients?
- Electronic documents are as valid as paper documents and once submitted via PEXA will have the same status as if signed original paper documents – for example, you will no longer need to sign a Form 1 and Form 24 Transfer and hand over originals at Settlement. These will all occur online.
- Solicitors are authorised to digitally sign documents on behalf of their client once the solicitor obtains “client authorisation” which is a process whereby the solicitor must verify the client’s identity and establish that the client has authority to provide instructions to purchase/sell the property.
- Digital signatures are able to be used by the person designated as the “signer” for a subscriber. Only certain parties can be a subscriber, these include financial institutions, lawyers and conveyancers. In Queensland, only a legal practitioner can be a “signer” for a subscriber. Once a digital signature is applied to a document:
- a) the document will be deemed signed by the subscriber; .
- b) the signature is binding on the subscriber and any person whom the subscriber is acting under client authorisation; and
- c) the signature of the subscriber may be relied upon by each party to the transaction.
So, practically, how will this work?
To illustrate, John decides to sell a house to Paul. They execute a contract and tick that they consent to the transaction being completed by PEXA. Paul is self-financed.
- John brings us his contract. We note that it is a PEXA contract. We complete the “client authorisation” process with John allowing us to sign all documents on his behalf electronically.
- Paul takes his copy of the contract to XYZ Lawyers who are also registered for PEXA. They similarly complete the “client authorisation” process with Paul to enable them to sign all documents on his behalf electronically.
- The firm (each being subscribers) generate all transfer documents required to complete the sale electronically and when instructed by their client the authorised signer places a digital signature on those documents which is deemed binding on their client.
- At settlement, a live portal is opened whereby both solicitors are logged in. XYZ Lawyers do a real time transfer of the funds for settlement to our firm’s trust account and pay the OSR (also on PEXA). On seeing the transfer of funds completed, we authorise lodgement of the transfer to the titles office digitally.
- The transaction is complete. No multiple communications of documents and need to get JP witnesses for the parties.
- Once funds are cleared in account, they are released to John.
- Paul now owns the Property.
Where to from here?
All new things take time to adjust to and the use of PEXA is no different. Both parties have to consent to using PEXA otherwise the current paper based system will continue to apply.
There are still some transactions which will not be able to be done via PEXA, but standard “cottage” conveyancing is capable of full digitalisation and represents a more cost and time efficient method of completing transactions.
If you have any questions about this article, please contact our Brittany Biron on 07 3859 4500 or firstname.lastname@example.org for further information.