During the conveyancing process you will hear many different terms. Here our conveyancing team explains some of the common terms and how electronic settlements occur.
Much of the process and most the records are now electronic. The Land Titles Office now has electronic records of your property and ownership details and the changes are all done online. Paper titles are to be destroyed at settlement and can be converted to electronic records.
It is important to be careful when buying or selling with electronic conveyancing. Emails can be intercepted by hackers. So, it is important to verify important information such as bank account details over the phone with your conveyancer and not rely on emails alone.
One of the first steps you will take is to verify your identity. This requires an in-person consultation. It can be done in a variety of ways and there are even companies that can come to your work or home to verify your identity. You will need to do this if you are buying or selling a property or any other property transactions.
Verification of ID is a requirement for electronic conveyancing. If you have had a legal matter recently you won’t need to keep repeating this with your lawyer or conveyancer each time – just every year or so.
PEXA is an online settlement platform. It is like a virtual settlement room where monies and documents are exchanged. Only authorised parties such as lawyers and lenders can use these online platforms.
PEXA integrates with other government sites such as Land Titles Office and State Revenue Office and banks for the transfer of monies.
Electronic Legal documents – Where hard copy documents once had to be mailed around between all the parties now most of those forms are no longer required. They are in an electronic format in PEXA and get signed off by your lawyer or conveyancer. You must sign an authority for your conveyancer or lawyer to sign on your behalf.
All the parties still attend an online settlement. This is the Vendor’s and Purchaser’s legal representatives and their lenders and sometimes other parties who act for caveators for example.
Only Lawyers and conveyancers can access and process settlements online. The settlement space is setup by the vendor or purchasers’ lawyers and banks are invited into your online settlement and submit and verify what funds they are expecting or providing.
There are various stages and electronic documents that need to be checked and verified. Once settlement figures are agreed it is ready to go and documents signed settlement will take place online automatically.
It takes around a half an hour for a settlement to be completed. If it doesn’t go through for any reason, it will automatically reschedule for the next time slot on the day.
Monies are transferred electronically during the settlement, so the financial details need to be correct. If anything is altered all the parties must resign and reauthorise the settlement. This can cause some issues or delays if there is a last-minute change.
At the completion of settlement, the Vendor (or their mortgagee) will have their money and you will have your name on the title as the new owner and you bank will have a mortgage on the property.
The registration process after settlement used to take a day or two and a visit to a few government offices to achieve before you had your name on title.
Transfer (previously Stamp) duty also has its own online portal with the State Revenue Office. Each state has a different process. When you are buying a property your conveyancer will upload the details and you will need to sign and confirm the details. It is important that all this gets done quickly so this is completed and there are no delays.
The ATO also requires purchasers to pay 10% Capital Gains Tax from a purchase that exceeds $2 million if the Vendor is a Foreign Resident Vendor and does not provide an ATO withholding tax clearance certificate. This is now commonly a standardised form and part of the conveyancing process.
Your conveyancer will make sure the form is provided by the Vendor. If they don’t you will need to withhold money from settlement if this applies.
Electronic conveyancing has eliminated some of the paperwork produced and difficulty with working with original documents. It has also however come with some other potential issues of its own.
With all property records being electronic there could be an increased risk of title fraud. Title insurance does protect property owners from title-fraud and we recommend getting covered if you are buying a property.
To speak to how one of our conveyancers can help you buying or selling a property call us on 1300 900 440.
At Conveyancing Depot we are a dedicated conveyancing law firm. We provide expert legal advice on conveyancing matters.
Disclaimer: This article has been prepared for general information purposes and may not apply to your situation. This information should not be relied upon for legal, tax or accounting advice. Your individual circumstances will alter any legal advice given. The views expressed may not reflect the opinions, views or values of Conveyancing Depot and belong solely to the author of the content. © Conveyancing Depot Pty Ltd.
If you require legal advice specific to your situation please speak to one of our team members today.
Glenn is the founder of Conveyancing Depot and the Managing Partner. He has extensive experience...