Some 20 years in the making, property conveyancing and settlements are finally going electronic and moving online. The online platform known as PEXA (Property Exchange Australia) eliminates the need to attend a physical settlement with bank cheques and paper documentation, followed by instantaneous electronic lodgment of paper instruments with the Land Titles Office and notification to the rating authorities of the change of ownership. In addition to this, funds transfer to the discharging mortgagee bank, balance of funds to the vendor and payment of rates and land tax also occurs instantaneously.
- Fast access to funds – Payout figures will be available online and funds available shortly if not immediately after settlement, removing the several days waiting time for a bank cheque to clear.
- Registration within minutes – Buyers will have peace of mind knowing that they are the registered owner within minutes of settlement, replacing a manual process that used to take a week or more.
- Reduced delays – All documents are visible to the vendor and purchaser representatives online once created to allow for any errors to be corrected prior to settlement. Delayed settlement due to an error on a cheque or signatures that do not match on a contract, mortgage or transfer of land document will be a thing of the past.
What you need to know
To support this change, various steps in the conveyancing process have been updated and new steps have been introduced. The critical changes are –
- Verifying the identity of clients according to a new Verification of Identity Standard is at the beginning of a transaction
- Obtaining client authorisation to electronically certify and sign land transfer documents on behalf of clients
- Replacement of paper State Revenue Office duties forms with a single all-in-one form that can be emailed to the client for signing online
We are currently in a transition phase, which allows for both paper and electronic documentation and settlement, however this will culminate in October 2018 whereby the majority of transactions will need to be completed via PEXA.
Whilst it will take time to adjust to the new system, ultimately the result will be more streamlined and efficient conveyancing practices and on time settlement for clients.
- Verification of Identity
- Client Authorisation
- SRO all-in-one duties form
- Paper Titles
- Settle Me Notification Service
In order to establish your entitlement to transact on PEXA we are required to verify your identity at a face-to-face meeting and to certify certain original identity documentation provided by you. We perform this process using an app called IDfy which securely stores your data in the cloud.
A firm must take steps to identify a client themselves, they cannot rely on the verification of another solicitor. The only independent verification we can accept is Australia Post. Once verification is complete it is valid with that firm for 2 years.
At the time of your appointment you need to bring with you all the original documents from the Category that you can satisfy. Download VOI – Acceptable documents PDF
Alternatively, if you are unable to attend our office in person we can provide you with a form to have the process completed at your nearest Australia Post Office for a fee.
Please note the following for certificates:
- Birth certificate must be registry issued, an extract of entry is not acceptable.
- Marriage certificate must be registry issued, the one you received on the day is not acceptable. This requirement will generally only apply to women who have changed their name from their birth surname to evidence the difference in surnames.
Only registered PEXA Subscribers are able to use the system and therefore require the authorisation of their clients to electronically sign documents on their behalf.
During the transition phase paper Transfers of Land can be signed by the solicitor or conveyancer acting pursuant to a Client Authority.
Generally an individual Client Authorisation will be signed for each transaction, however if multiple properties are being sold at the same time or land is being subdivided for sale of multiple lots, a batch or standing authority may be given.
We will arrange for you to sign a Client Authorisation form at the start of a file when we complete your VOI.
SRO all-in-one Duties Form
16 paper forms have now been combined into a single, streamlined application that will be used to calculate stamp duty applicable to a transaction. This will end double handling, duplication of information and data inconsistencies.
Some common forms that have been replaced are the goods statement, purchaser statement, principal place of residence concession declaration, pensioner concession declaration and first homeowner declaration.
The form can be signed online or manually.
Online signing: you will be emailed a rendered image of the form in PDF format. You can accept and sign online via a tick box, or decline.
Manual signing: The form can be printed to be signed manually. We will then retain the signed form for a period of five years and complete the signing online on your behalf.
Once all parties have signed a settlement statement is produced. All of the parties to a transaction will have seen the settlement statement prior to settlement which will reduce failed or delayed settlements due to errors on multiple forms.
We have electronic transfer documents and online duties forms, “what about paper titles?” I hear you say.
On 22 October 2016 the four major banks underwent a process to convert all of the paper titles that they hold to electronic titles. This was not something that was widely publicised. Again on 22 July 2017 other lenders such as Bendigo and Adelaide Bank Limited and Rural Bank Limited also undertook a bulk conversion of paper titles to electronic titles.
These conversions had the effect of making the first registered mortgagee the Controlling Party of the electronic title. This means that in the future when you sell a property you will change the Controlling Party in PEXA rather than handing over a paper title.
Therefore, in order to transact on PEXA if a bank holds the title they will electronically nominate it into the PEXA workspace to enable settlement to occur.
Similarly, if we hold the paper title on your behalf we can convert it to an electronic title and nominate it into the PEXA workspace to enable you to transact.
Owners of property who have a clear title have the choice of either receiving a paper title that may be stored with their solicitor, or they can pass electronic control to their solicitor who is a PEXA Subscriber.
To keep you involved throughout the process, you can sign up to PEXA’s notification service PEXA Key.
- PEXA Key is the settlement app for buyers and sellers. It offers high-level settlement tracking and importantly, a secure way to communicate bank account details.
- Security Complete important tasks, such as confirming your bank account details with your representative, via a securely encrypted platform.
- Settlement updates Receive updates on the progress of your property settlement.
- Learn what to expect Understand the settlement process and learn what to expect when buying and selling property.
- Safe and secure PEXA Key is powered by PEXA, Australia’s official online property exchange.