PEXA electronic conveyancing in, paper-based settlements out from 1 October 2018.
By Nafsika Palbas
2 October 2018
Traditionally, settlement for the sale or purchase of a property has involved lawyers and conveyancers for the seller, buyer and banks meeting to physically exchange documents and funds to transfer ownership of the property from the seller to the buyer. These are known as paper-based settlements.
As of 1 October 2018, paper-based settlements are no more and almost all property transactions in Victoria must be lodged electronically through an Electronic Lodgement Network (ELN) such as PEXA (Property Exchange Australia). Some very limited exceptions apply.
As of 1 August 2019, Land Use Victoria (Victoria’s Land registry) has mandated that 100% of property transactions must be lodged electronically.
Other states in Australia are likewise in the process of transitioning to electronic conveyancing.
What is electronic conveyancing?
Electronic conveyancing is where property settlements are completed on an electronic platform in a “virtual” settlement room.
Instead of physically attending settlement, the lawyers and conveyancers for the seller, buyer and banks participate in the platform to complete all tasks required for settlement. At the nominated settlement time, the funds are electronically transferred and documents are lodged with the State Revenue Office of Victoria for payment of stamp duty and Land Use Victoria for registration.
This means that the seller has faster access to the proceeds of sale as it doesn’t have to wait several days for a bank cheque to clear. For buyers, this means they become registered in the title to the property immediately.
What safeguards are there for electronic conveyancing?
ELN’s, such as PEXA, are governed by legislative framework. The legislation establishes the Australian Registrars’ Electronic Conveyancing Council (ARNECC) to regulate electronic conveyancing.
PEXA has implemented significant security measures to govern the electronic transactions effected on the platform. These measures include verifying the identity of users transacting on the platform and the Residential Seller Guarantee.
These measures are in addition to those already mandated by Land Use Victoria as to client verification of identity and Client Authorisations. Tisher Liner FC Law also has additional internal processes to ensure the appropriate checks and balances are in place.
Tisher Liner FC Law has been regularly using PEXA for property transactions and off the plan developments well prior to Land Use Victoria making it mandatory.
Self Managed Superannuation Funds and Property Investment Part 2: Stamp Duty when Transferring Property Assets
By Ron Cohen
19 December 2018
Self-Managed Superannuation Funds and Property Investment Part 1: Using Borrowed Funds for Real Property Investment
By Ron Cohen
4 December 2018
Developers – Are you ready for 1 July 2018? New GST withholding regime for residential property transactions
By Nafsika Palbas
26 June 2018
Considering renovating your apartment? Have you checked you legally own it?
By Rachael Hammond
12 June 2018