Electronic conveyancing, or e-Conveyancing, refers to settling a conveyancing transaction through an electronic lodgement network operator (ELNO). Currently, PEXA is the only ELNO used in Australia. E-Conveyancing replaces the need for settlements to occur on paper, making transactions more accessible for all parties.
Despite making the conveyancing process easier overall, e-Conveyancing creates additional steps for lawyers, conveyancers and clients. In this article, we will discuss these steps, as well as the benefits and concerns related to e-Conveyancing, in more detail.
How Does PEXA Work?
In the PEXA platform, a lawyer, conveyancer and bank representative, can participate in an electronic workspace or virtual settlement room. This is where the documents can be:
- firstly, prepared;
- secondly, signed by the parties; and
- finally, lodged for registration.
Once this is complete, the rest of the conveyancing process can occur. This includes the:
- client paying the purchase price; and
- disbursement of the settlement money.
Lawyers and conveyancers must comply with the Electronic Conveyancing (Adoption of National Law) Act 2012 (the ECNL) when conducting e-Conveyancing transactions. The ECNL provides two sets of rules, including the:
- Model Participation Rules, which outline the relationship between PEXA and lawyers or conveyancers; and
- Model Operating Rules, which outline the relationship between PEXA and the land title registries.
As the client, you will not be able to access PEXA directly. Instead, you will need to provide authorisation for your lawyer or conveyancer to access it on your behalf. This authorisation can be:
- for a specific transaction; or
- alternatively, a standing authority until a specified date.
After you provide this authorisation, your lawyer or conveyancer can:
- sign documents for you;
- present documents for registration; and
- authorise or complete any financial aspects of the transaction.
A client authorisation is optional if you are engaging a lawyer or conveyancer to sign or register any electronic document relating to a:
- caveat, which is a type of statutory injunction;
- priority notice; or
- settlement notice.
Verification of Identity
When you provide your client authorisation, your lawyer or conveyancer will also need to verify your identity. They may use an identity agent to do so. To carry out this verification, they need to:
- conduct a face-to-face interview with you; and
- view your identification documents.
This requirement reduces the risk of fraud. If you have verified your identity in the last two you years, you will not need to re-verify it. Instead, your lawyer or conveyancer will need to try and ensure that they are dealing with the same person.
What Are the Benefits of e-Conveyancing?
The main benefit of e-Conveyancing is time-saving. Ultimately, your lawyer or conveyancer will spend:
- less time liaising with the other parties by using the PEXA platform instead; and
- no time physically obtaining, signing, and registering paper documents.
This time-saving usually translates into you, the client, paying lower fees. Additionally, you will have fewer disbursements, as there will be no couriers, bank cheques or settlement agents to pay for.
A further benefit of e-Conveyancing is that you will not need to physically attend your lawyer or conveyancer’s office. Ultimately, this means that you:
- will save time; and
- have a greater range of lawyers or conveyancers to choose from – including those that work online or remotely.
Are There Any Concerns With e-Conveyancing?
Because e-Conveyancing happens in a virtual space, there are concerns about whether conducting an electronic settlement is as safe as a paper settlement.
As a result of this incident, PEXA improved their security measures by monitoring changes to passwords, users and account numbers.
Additionally, PEXA introduced their residential seller guarantee, which protects sellers of property from fraud. This guarantee applies:
- for the sale of residential property; and
- where the lawyer or conveyancer enters the correct bank account details, but the seller’s funds are then misdirected.
As long as all of the parties are up to speed with the legal requirements, e-Conveyancing can save time and money. The necessary legal requirements include:
- client authorisation; and
- verification of identity.
To ensure the security of PEXA, lawyers and conveyancers should have proper checks and balances in place. If you have any questions, contact LegalVision’s property lawyers on 1300 544 755 or fill out the form on this page.
Was this article helpful?
We appreciate your feedback – your submission has been successfully received.