Electronic conveyancing is here: what it means to property investors
After years of debate and consultation, electronic conveyancing in South Australia is finally here, the birthplace of Torrens Title system of real property ownership, with fundamental changes to the way in which land transactions are carried out “online” having already taken effect.
The changes not only affect how practitioners such as solicitors and conveyancers carry out these transactions on their clients’ behalf but will impact on all people who buy, sell, develop and mortgage real estate which is to say just about everybody.
Out with the old, in with the new
At time of writing, we are in a transitionary period to allow the new practices to take over from the old practices will end on 4 November 2016 after which time the changes will have taken full effect ushering a new dawn of property conveyancing which is designed to:
- Streamline existing processes;
- Strengthen the integrity of conveyancing practise;
- Keep pace with e-commerce and other developments in the online business world
Top 6 key things to know for consumers and investors
Now that e-conveyancing is here to replace an essentially very laborious paper based system, you should be aware about:
- The biggest change that people will need 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 to give effect to any transfer or dealing of title. It’s essentially all done online and instead of issuing you a title to evidence settlement has occurred, you will receive a Notice of Confirmation of Registration. No longer will there be the romance of receiving a title when your property becomes freehold, but on the other hand this is a boon for investors because the whole process of buying and selling of land should be easier for the reasons that follow.
- Anyone transacting in land in South Australia must be able to have their identity verified to safeguard other consumers from fraud. This verification of identity process (“VOI”) has already been in place since April 2014 but will be perfected when the transitionary period ends on 4 November 2016, so practitioners and investors are well acquainted with the requirements and they make sense in this increasingly complicated world where there is a greater risk of identity fraud.
- Once clients are formally identified under VOI, it is necessary for them when engaging a solicitor or conveyancer to carry out the transaction to sign a Client Authority in favour of the solicitor or conveyancer which will then enable the solicitor or conveyancer to not only sign the instrument of transfer of title or other instrument in relation to the transaction but to carry out the essential elements of the transaction in the on line space. The important thing to know for investors is that you can authorise your solicitor or conveyancer to carry out multiple conveyances on your behalf by giving him or her a standing authority until revoked or limited by a certain date.
- The onus is on the solicitor or 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). The solicitor or conveyancer has the additional responsibility to certify that the documentation is correct which they have always had in a limited sense but now this certification has been beefed up to ensure the integrity of the whole process of conveyancing in the digital realm.
- The changes to the Real Property Act now allow for transactions to occur not in the settlements room of the Lands Titles Office, an archaic process which bemuses the uninitiated at the best of times but has been the way things have been done by solicitors and latterly conveyancers for more than a century, but increasingly through an electronic platform called Property Exchange Australia Limited (“PEXA”). PEXA is an Australia-wide, sophisticated online hub where property professionals and financial institutions dealing in property, and it is here to stay.
- A related online service that investors and mum and dad type of clients should be interested is “Title Watch”. For a relatively small fee, Title Watch allows you to monitor activity against any certificate of title you nominate. Up to 20 certificates of title can be included in a single subscription.an online subscription service that monitors activity against a selected certificate of title. When activity is detected, a subscriber will automatically receive an email and an optional SMS alert. This is manna from heaven for investors, enabling them to keep their finger on the pulse detecting activity against a property or properties they are interested in a much more transparent and secure than what has been the case for decades. When an agent purchases a Property Interest Report on a property, or a Property Notice is lodged by a solicitor on a title to flag an intended transaction on the title, or when a lodgement of a document such as a caveat is noted on a title, these are all activities that will trigger a notification from Title Watch.
Everyone will benefit
So watch this space. Electronic conveyancing is here. In time, once we understand the procedures and get through the inevitable teething issues, everyone will benefit. You the prudent and forward-thinking consumer or investor, and us the professionals working for you at the digital coalface, together ensuring the ongoing integrity and efficiency of the conveyancing process in our fast-changing world in what is the most important commercial decision that each of us will ever have to deal with in our lives.
At Di Rosa Lawyers, we are already compliant and looking forward to changes becoming permanent. If you have a query about this blog, or conveyancing in general, please do not hesitate to contact us on 8237 0559 or email us at email@example.com.