Effective as at 1 July 2019, all standard conveyancing transactions in NSW must be effected electronically. The move away from paper has been under way for several years, and many smart property investors are already familiar with the Property Exchange Australia Limited (PEXA) online lodgement and financial settlement platform. Over all, the message for those who still have questions about the process is that PEXA is a safe, fast and cost-effective way for all parties involved in property transactions.
Here is a brief summary of what you need to know.
The Advantages of eConveyancing
The traditional method of conveyancing required a lot of paperwork, and wherever there is paper, there are errors. Avoiding errors takes cross-checking, which takes time, which costs money. PEXA’s new online document checks reduce the risk of errors occurring and the cost and delay associated with the previous process.
As payments are processed digitally, financial transfers also occur at a faster rate. The process of lodging documents which register ownership of property is also far quicker and the SettleMe app allows buyers and sellers to track the process in real time.
Finally, there is no need for the cumbersome process of scheduling face-to-face meetings for document exchange and execution or for the transfer of cheques.
Five Steps
PEXA is a tool that comes into play after the details of a contract for the sale of a property have been negotiated. That negotiation still requires expert skill and advice. Inspections and other due diligence are still necessary. Thereafter, however, the process becomes more automated.
- Step one in the process is for a buyer’s solicitor to set up a workspace which all interested parties can access. This is essentially a virtual office. By now, solicitors, conveyancers and financial institutions – any party with an interest in conveyancing transactions – will have subscribed to the PEXA platform.
- Then, documents memorialising the details of the deal are created and checked.
- At a predetermined time, PEXA will execute the transaction.
- Within minutes, PEXA will trigger the Reserve Bank of Australia to release funds. The transfer is virtually instantaneous.
- When settlement has occurred and the funds are disbursed, the deal is done.
Cybersecurity
Hacking is not a silly concern, as anyone with a credit card or bank account knows already. After a widely-reported incident in which a conveyancer’s email was compromised, PEXA bolstered its cybersecurity in three ways:
- Creating new users in an “inactive” mode. Only PEXA can activate new users and will do so only after confirming the new user with their members;
- Adding timestamps to see when the PEXA workspace was last updated; and
- Introducing an additional verification layer upon sign-in.
No system is flawless, but the process for electronic settlement and lodgement of real property transactions is a giant step forward for anyone buying or selling property.
Are you new to the requirements of the PEXA system? No worries. The attorneys at Owen Hodge Lawyers have the experience you need. Please call us at 1800 770 780 to schedule a consultation. We will be happy to guide you through the process.