After successfully conquering New South Wales and Victoria, the National Electronic Conveyancing System has its sights set firmly West as it aims to take hold in South Australia in 2015, but how, if at all, will the changes affect clients?
Following years of discussion and planning, electronic conveyancing is scheduled to finally hit South Australia in the third quarter of 2015, bringing with it a complete overhaul of the conveyancing process for legal practitioners and conveyancers.
The National Electronic Conveyancing System (NECS) is a scheme that facilitates the online completion of real property transactions and lodging of land title dealings. The intent of the system is to make the overall conveyancing process more efficient by eliminating the need for preparation and lodgment of physical documentation including the need to attend settlement at the Lands Titles Office.
The basis for the scheme is the creation of an online workspace which will enable conveyancers and legal practitioners to, among other things:
- lodge land title documents and related instruments needed to register changes in property ownership and interests;
- allow all accredited parties involved to access and complete the various documentation required to finalise the property exchange or transaction; and
- allow for the electronic settlement of all financial transactions at a nominated date.
While the intention is to eventually enable the entire process to be performed through the online workspace, initially only the following documentation will be able to be completed through electronic conveyancing:
- Mortgage;
- Discharge Mortgage;
- Caveat;
- Withdrawal of Caveat;
- Transfer Title;
- Nomination;
- Withdrawal of Nomination;
- Consent;
- Form 24, Form 25;
- Notice of Acquisition; and
- Notice of Sale.
The benefits for legal practitioners and conveyancers are that the online process allows for greater efficiency in file management and a streamlined settlement process.
What does this mean for Clients?
The client will be obliged at the outset to attend a face to face meeting with the practitioner. At this meeting the client will need to authorise the practitioner to enter the digital workspace as an authorised representative of the client. This will include authorising the practitioner to apply a digital signature on behalf of the client to a digital transfer. Additionally the practitioner will be required to identify the client using a point score similar to that used by banks in opening an account. It is obligatory that the practitioner (only a lawyer or registered conveyancer) take all reasonable steps to identify the client.
The streamlining of the settlement process by creating the possibility of online settlement removes the need for practitioners and banks to attend at the Lands Titles Office.
This also allows multiple settlements that are dependent on each other (i.e. a purchase of land depending on a sale) to occur simultaneously and immediately, once again reducing time and creating greater transparency.
One aspect of the new system that may seem counter intuitive to this philosophy is the requirement of a Verification of Identity (VOI) for each party to the transaction. A VOI requires added obligations on each party involved in a transaction to have their identity verified by the practitioner or conveyancer representing them in conjunction with the requirements of the VOI Policy.
The VOI Policy facilitates the security of each party to a transaction by limiting fraudulent conduct.
As well as VOI, other strategies such as the new Certification policy (which requires practitioners or conveyancers to certify each conveyancing transaction) as well as the introduction of the Priority Notice (a notification of intended dealings with land to protect the interest of parties from other dealings until the transaction has been completed) help to increase the security measures around property transactions and promote consumer confidence in the system.
The majority of the changes will be felt by practitioners. Thankfully, the overwhelming effect is that clients can expect a more efficient production of the same service while feeling more secure about entering into a property transaction as a whole. Will it be less costly? Whilst this system brings with it significant advantages, lower fees may not be one of them. Time will tell.
