On 1 July 2019, electronic conveyancing will be compulsory in New South Wales. Electronic conveyancing provides a quick, simple way to complete the purchase or sale of property.
What is electronic conveyancing?
Electronic conveyancing is a conveyancing transaction where solicitors and conveyancers settle electronically through the platform provided by Property Exchange Australia Limited (PEXA). PEXA is a service in which representatives on behalf of the vendor, purchaser and their incoming or discharging mortgagees prepare for the transfer of real property.
It is a virtual settlement room that stores the relevant data required for lodgement of dealing at NSW Land Registry Service and the transfer of funds upon settlement. As a result, physical attendance at settlement is no longer required and it eliminates the need for bank cheques and the swapping of paper documentation on the settlement day.
How does this help you?
All funds transfers are done electronically through a direct connection to all major Australian banks which means that there are fewer delays. If you are a vendor, this means that you will receive the proceeds from sale in real time.
Further, once the registry documents are completed in PEXA, they are lodged at Land and Property Information electronically. This eliminates any further delays and hassles that may have occurred during a paper settlement as PEXA highlights these errors before the time for settlement occurs. You will have peace of mind knowing that all documents lodged through PEXA will be lodged instantly and if there are any issues, these will be dealt with promptly.
What protections does PEXA have?
There are several precautions and guarantees PEXA has in place. These include:
- Verification of Identity
Solicitors and conveyancers must now verify the identity of their clients and check that they have the authority to deal with the land, in order to comply with the rules under s 12E of the Real Property Act.
Full compliance is required with the NSW Land Registry Services conveyancing rules in order for lenders to be sure that they can effectively identify borrowers in electronic conveyancing transactions to avoid, or at least minimise instances of fraud.
Solicitors do this either by:
- Applying the Verification of Identity Standard; or
- Verifying the identify of a person in some other way that constitutes the taking of reasonable steps
The Verification of Identity Standard requires a face to face interview and production of at least two original identification documents, usually a Passport and Driver’s Licence.
- Digital Signature
Documents that require a signature in the electronic workspaces are signed using a digital certificate. A Digital Signing Certificate (DSC) is the solicitor’s unique online identity and signature which is made up of a token (USB), software on your computer and a password.
Only subscribers to the system will be able to access the system and sign documents. The signer must certify that the identity of the client has been verified, that they have client authorisation and supporting evidence that the information in the document is correct.
- PEXA Residential Seller Guarantee
The PEXA Residential Seller Guarantee provides protection to sellers in the event of certain kinds of fraud. Where the PEXA Residential Seller Guarantee applies, the seller has the option to make a claim against PEXA rather than recovering cost through an alternative route.
This only applies to the sale of residential property where the vendor’s (the sellers) funds are misdirected after the vendor’s practitioner has entered the correct bank account details into the PEXA platform. This liability is capped at $2 million.
In requiring all transfers, mortgages and discharges of mortgage to be lodged electronically on 1 July 2019, NSW is simplifying the conveyancing process and making it easier and more efficient for clients, solicitors and banks. If you or someone you know is wishing to buy or sell a property and is in need of a solicitor, please contact our office on 02 8014 5885 and we will be in touch to assist you.