The term ‘electronic conveyancing’ does not mean the use of digital signatures on contracts or the use of artificial intelligence to regulate and advise on your legal obligations under a contract for sale (although it may well do soon!).
For now, electronic conveyancing refers to the manner in which financial settlement of transactions taken place.
Despite being one of Australia’s largest financial markets, up until a few years ago the property market was probably one of the most clunky, at least in terms of how transactions were settled.
Vendors, purchasers and banks used to – and still do – physically meet at settlement venues to exchange actual copies of bank cheques, deeds and authorities.
However, the trend is towards conducting these settlements on online platforms (so called ‘Electronic Lodgment Network Operators’ (ELNO)) where monies are transferred electronically and deeds and authorities are in paperless, ‘de-materialised’ form which integrate with the Land Registry.
WHICH ARE THE EXCHANGES?
The main ELNO is called PEXA whose website states over $304bn transactions have been settled on since it’s inception a few years ago.
Last year,a new ELNO called ‘Sympli’ was announced as being Australia’s second recognised ELNO. Sympli is expected to become properly operational in New South Wales in early this year.
It will soon become compulsory in NSW to settle transactions on an ELNO. Presently, probably 70 – 80% of Dott & Crossitt’s deals are settled on PEXA at the moment.
IS IT RISKY?
There was a controversy last year when a Masterchef contestant became the victim of a fraud conducted on PEXA.
However, the reality is there’s always risk of fraud in high-value transactions, whatever the forum. And traditional ‘paper’ settlements have had many experiences of fraud over the years.
IDENTITY VERIFICATION IS KEY
There will certainly be fraud on electronic conveyancing mainly in the form of online identity theft.
That’s why one of the important mitigants for this risk is for your solicitor to conduct a thorough identity verification process with you and to confirm key instructions and figures with you via telephone calls.
It is also possible to take out additional so-called title-insurance to cover off the risk of fraud, which we can talk to you about during the conveyancing process.
Please do not hesitate to contact our office on (02) 8315 3118 should this article raise any queries.