On 4 July 2016, some of the greatest changes to conveyancing since the introduction of the Torrens Title System in the 1800s came into effect. As the conveyancing world embraces modern technology, Electronic Conveyancing was officially introduced in South Australia.
So what does this mean for the consumer? Well for those of you who have an interest in real estate, the legal procedures surrounding property transactions have recently undergone extensive reform. The main changes can be summarised as follows.
Similar to how the Australian Stock Exchange moved towards an automated trading system in the late 1980s, conveyancing can now be conducted electronically as well as manually. The system that is used to transact property settlements electronically is called PEXA (Property Exchange Australia). At present, there are a number of restrictions to conducting settlements electronically as the system is still being developed. If your conveyance is able to be conducted electronically however, the main benefit for the purchaser is instant registration of their name on the Title (presently it takes the Land Titles Office around 4 to 6 weeks to officially register a purchaser’s name from when settlement occurs). Meanwhile for the vendor, electronic conveyancing means instant access to your settlement funds (no waiting for cheques to clear). It does come at a cost though – around $107 per purchaser, vendor or mortgagee.
Verification of Identity first became compulsory in 2014, but in a limited form (for example only when a name on the Title was being transferred or changed). Now it has been expanded so that your practitioner will need to verify your identity if you are a party to almost any property transaction, including caveats and leases. Some of the documents that your practitioner can use to verify your identity include your driver’s licence, birth certificate and passport.
Along with verifying your identity, your practitioner will now need to verify your authority to deal with the land. Your practitioner will make you aware of the acceptable documents that they require to satisfy this requirement.
Once your identity and authority to transact have been verified, you will be required to sign a Client Authorisation form. The Client Authorisation form allows your practitioner to legally act on your behalf and sign specific documents to complete the transaction. Where a settlement occurs electronically, your practitioner will prepare the Land Titles Office documents online and digitally sign them on your behalf.
Your practitioner is able to lodge a Priority Notice on your behalf at the Land Titles Office. The purpose of this notice is to protect your priority in an upcoming transaction and notify other parties that a transaction is pending.
Probably one of the biggest changes to conveyancing is that the Land Titles Office will no longer issue the duplicate Certificates of Title. In its place, a Confirmation of Registration notice is issued by email to your practitioner. This means that if you currently hold original Titles at home, they are no longer required to be produced at the Land Titles Office. If you have lost your Title it is no longer necessary to replace it. We recommend that you still retain your Title in a safe place as your practitioner can use the Title as proof of ownership when they verify your authority to deal with the land.
For those of you who are concerned about fraudulent activity on your Title, you can register your details on Title Watch via the government website www.sailis.sa.gov.au. When any activity is registered on your Title, it triggers the system to send you an email notification and hence warn you of any fraudulent activity. Title Insurance also protects you from fraudulent activities (plus other risks) and can provide you with further peace of mind. Your practitioner can provide you with more information in relation this.
More than ever, it is important that you seek legal advice whenever you transact in property. As increasing numbers of transactions are undertaken electronically, it is important that you engage a solicitor or conveyancer to act for you and ensure the protection of one your most important assets.
This communication provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Should you wish to discuss any matter raised in this report, or what it means for you, your business or your clients' businesses, please feel free to contact us.