The Victorian and Federal governments have established a new system for electronic conveyancing in Victoria. This new system enables electronic settlements and lodgment of documents. Instead of manually exchanging documents such as the Certificate of Title, Discharge of Mortgage, Transfer of Land and bank cheques, the whole process has been moved to a virtual settlement room. Caveats and their registration and withdrawal, as well as the registration and discharge of mortgages can now also be completed electronically though Property Exchange Australia Limited (“PEXA”).
PEXA is a publicly listed company. They have the big four banks and the Victorian State government as some of the major shareholders. Solicitors’ firm and conveyancers are not currently being forced to sign up to the system. It is predicted that it will grow however, as its ease and usefulness becomes apparent with increased use of the system.
A big change with the system will be the elimination of physical Certificates of Title from the settlement process. Electronic certificates of Title (“eCT”) will be registered with the Land Titles Office so that there will be no need for physical copies.
The risks associated with identification of parties are being minimised through a strict “verification of identity” process aimed to safeguard the parties from fraud. Hendersons Legal has recently been involved in a Supreme Court case, Southage Pty Ltd v Vescovi [2014] VSC 141, where a client’s signature was forged on a mortgage, which the Court subsequently set aside awarding our client her legal costs. It is anticipated that such complex and expensive legal cases are likely to be avoided in the future by the careful identification of buyers and sellers at the Victorian Land Title’s Office.
A further feature of the new electronic conveyancing system is that as the lodgment process can be started and double and triple checked prior to settlement time, the actual transfers will occur instantaneously. The elimination of bank cheques will not only save clients money but will mean that the transfer occurs much nearer to real time.
While complex settlements will most likely remain paper based into the near future, it seems likely that electronic conveyancing will continue to grow. The changes will mean that contracts of sale need to be altered accordingly and clients will need to consider which method is best for their situation. Contact Hendersons Legal on 03 9629 2211 to speak to one of our conveyancing solicitors in Melbourne about your property transaction today.
This content is intended as commentary and should not be construed as legal advice.
For more information call David Henderson on 03 9629 2211.
