Three years of Electronic Conveyancing for Johnston Withers Lawyers & Conveyancers

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It has been three years since Johnston Withers Lawyers and Conveyancers lodged the first ever registry instrument by electronic conveyancing in South Australia, a caveat.

We were early on-boarders to e-conveyancing recognising from the outset the efficiencies it would bring to our practice, particularly the regional offices. We registered our interest  with Property Exchange Australia (PEXA) and had our trust account signatories and main practitioners equipped with their unique digital certificates weeks prior to the system going live. We completed the registration process to become PEXA subscribers and, as Head of Conveyancing for Johnston Withers, I presented to the Board on how we would manage our compliance obligations and changes required to our internal systems to allow for the mix of paper and electronic transactions in the future. As far as was possible we had all of our systems in place to take advantage of the new electronic system.

During this time I was consulting to the Australian Institute of Conveyancers South Australia, delivering training to South Australian conveyancers and solicitors on the new e-conveyancing platform.  This position allowed me access to the PEXA training site (a dormant version of the live site) which enabled me to gain a firm understanding of how the platform would operate including how it would interface with the State Revenue and Land Titles Office. The day the PEXA platform went live I logged on at 9am, set up a work space and successfully lodged the first instrument.  It was an exciting day for me, and Johnston Withers was thrilled to be part of conveyancing history.

In the lead up to these events South Australian conveyancers and solicitors were very well prepared. The Australian Institute of Conveyancers South Australia (AICSA) ran a series of workshops providing thorough training to the industry members. Geoffrey Adam, then the CEO of AICSA worked tirelessly to ensure the industry was armed with the knowledge to transition seamlessly into the Electronic world.  The workshops ensured conveyancers and solicitors were made aware of the role the Australian Registrars National Electronic Conveyancing Council (ARNECC) would play in facilitating the implementation of the regulatory framework for electronic conveyancing. The Industry was provided with access to the first version of the ARNECC  Model Participation rules (MPR) [1] setting out how practitioners, law firms and conveyancing firms would operate. We learned about the ARNECC Model Operating Requirements (MOR) [2] the operating requirements of the Electronic Lodgment Network Operators (ELNOs), and we were introduced to PEXA (the first ELNO).  Being one of the later States to have the Electronic Conveyancing National Law (ECNL) proclaimed we were able to follow the roll out of e-conveyancing in the other jurisdictions. I certainly felt prepared to lead Johnston Withers into this new phase of practice and was impressed by the level of consultation from government and industry we had experienced.

Training our large conveyancing and property law team on the use of the platform was a staged operation. Johnston Withers has its head office in Adelaide with regional offices in Whyalla, Roxby Downs, Port Augusta, Clare and Murray Bridge. The aim was for all conveyancing and property law employees to be proficient in the process of e-conveyancing prior to any mandate to make certain e-conveyancing transactions compulsory. We were convinced that electronic settlement and lodgement would provide many benefits to our clients. We had a South Australian based customer service team at PEXA willing to attend our offices to help with the training of staff. So we set our policies and procedures in place, rolled out our training and started talking to our clients and other practitioners about the benefits of settling online.

Our optimism was well founded. Settling online provides clients with a greater certainty of successful, on-time settlements. Vendors and borrowers have their sale and loan proceeds processed as cleared funds to nominated accounts on the same day as settlement. Purchasers and lenders can be sure the lodgement of documents transferring ownership and registering a mortgage occurs as part of settlement (not weeks later as in some paper settlements) and registration of proprietorship or interest on title is much quicker when lodged electronically. (Land Services SA advise that July 2019 registration of proprietorship on title of transfers lodged in PEXA averaged 3 days compared to 10 days on paper).

Internally there are also many benefits. We have noticed banks quickly responding to discharge of mortgage requests. Time frames from receipt of documents via the platform to the acknowledgement of readiness to settle are significantly reduced. With the ability to converse directly with the banks and other practitioners in the PEXA workspace, administration time (including lengthy periods on hold in a phone queue to a bank or practitioner) has diminished. Our regional teams can manage electronic settlements from within their country offices and no longer have to arrange for settlement packets to be sent to Adelaide saving on postage and DX costs.  We can process third party settlement disbursements directly from the PEXA platform so that rates, taxes and other settlement related payments can be dealt with as part of the financial transaction and funds are often not required to be brought back to our trust account. We have experienced a significant reduction in delayed settlements when using PEXA. This in turn has decreased financial penalties and additional costs associated with such delays for our clients. Pre-lodgement documentation check has meant that requisitions occur at less than 1% of all our electronic lodgements.

We are currently undertaking a comprehensive internal review to ascertain an hours per file average time saving on electronic versus paper settlement transactions. We are anticipating our results will be similar to those reported by KPMG and Deloitte when commissioned by PEXA to undertake data based studies into time savings. KPMG noted an average time saving of between 3.45 and 4.45 hours per transaction and Deloitte reported 3.7 hours per transaction on an average 4 party transfer file.

When the mandate for electronic lodgement of standalone mortgage documents came into effect we were ready. The convenient online lodgement across jurisdictions and the standardised National Mortgage Form (NMF1) provide further positive outcomes to internal efficiencies and client experience. We continue to follow with great enthusiasm the advancement towards a further mandate. By embracing new technology and always future proofing our operating procedures, we will be in a position to lead into a 100% e-conveyancing environment with minimal business disruption when the time comes.

We know the Office of the Registrar General (ORG) intend that e-conveyancing will have further mandate in the future, consistent with the government’s digital by default policy and commitment under the Inter-Governmental Agreement.  Recently speaking with Jenny Cottnam the current Registrar General  we understand the ORG recognises there are matters which require resolution before the implementation of a mandating time frame. These matters were outlined in ORG Customer Information Bulletin published on 15 January 2019 issue 329 (CIB 329).  [3]

Amongst those matters requiring resolution outlined in the CIB329 was the completion of the Review of the Intergovernmental Agreement for an Electronic Conveyancing National Law (IGA Review) the final draft of which was handed down on 26 July 2019. [4] Further steps towards satisfying these requirements have been taken with an Amendment Bill recently passed to provide clarity in relation to the ORG’s ability to enforce a mandate and the release of Dr Rob Nicholls Report on the Interoperability Between ELNOs which was the summary of a NSW government lead initiative to engage stakeholders to discuss and seek resolution on how competing ELNOs would work together in the future and what happens if the parties want to use different platforms [5].

We understand Land Services Group (LSG) continue to work with the current ELNO, PEXA and the new ELNO soon to go live in the market, Symplii, to ensure that both platforms have the required capabilities to allow for the transition to a completely electronic conveyancing world.

While we are looking forward to a future of instant registration of all dealings we applaud the due diligence being undertaken by the ORG and anticipate the effective resolution of the matters concerned in CIB329. Afterall there is a lot at stake in getting in right – in excess of 450 billion dollars over more than 3 million transactions has been settled nationally on the platform. In the meantime our practice continues to complete electronic lodgements and settlements when it is in the the best interests of our clients to do so and continues to seek opportunities for advancement in the e-conveyancing space.

By Gemma Wallace, Head of Conveyancing, Johnston Withers Lawyers and Conveyancers

 

[1] Model Participation Rules – ARNECC version 5

https://www.arnecc.gov.au/publications/model_participation_rules

[2] Model Operating Requirements –ARNECC Version 5  

https://www.arnecc.gov.au/publications/model_operating_requirements

[3] Office of the Registrar General – Customer Information Bulletin: Ministerial decision regarding further mandating of e-conveyancing – 15 January 2019.

[4] Draft final report – Review of the Intergovernmental Agreement for an Electronic Conveyancing National Law

[5] NSW Government funded Independent Chair of the Interoperability Working Groups Final Report 2019, Dr Rob Nicholls: Interoperability Between ELNOs

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