Move to align paper conveyancing with electronic processes
Electronic conveyancing, which kicked off on the PEXA exchange this year, has reached the stage where state government bodies are looking at ways to align the rules for paper and electronic conveyancing and create the conditions for a smooth transition to the electronic system.Land Victoria has issued a consultation paper setting out proposed changes to conveyancing requirements and mortgage provisions in Victoria. The introduction of electronic conveyancing has resulted in different practices and requirements for paper and electronic conveyancing. Land Victoria's aim is to align paper and electronic processes and move towards uniform national requirements.Australia's electronic property exchange, PEXA, went live in June. ANZ, Commonwealth Bank and National Australia Bank are already on the system and other banks will follow next year. The system is operating in Victoria and New South Wales and will be available in all states by 2015.So far, banks are able to complete new mortgages and discharges on the system. PEXA's second system release, which will bring solicitors and conveyancers into the system, is scheduled for next year.Land Victoria's proposed changes cover verification of identity, mortgage provisions, certificates of title, authorisation requirements and priority notices.It is proposing that verification of identity, which is a requirement under the participation rules of the Electronic Conveyancing National Law, also apply to paper conveyancing transactions.A mortgage would be declared void if the mortgagee failed to take steps to verify the identity of the mortgagor.Under current rules, the certificate of title is often the only document used as evidence of ownership, but under the proposed change conveyancers, lawyers and mortgagees would have to take reasonable steps to verify the identity of their clients for paper transactions.Paper certificates of title will be phased out once the verification of identity changes are made. Electronic certificates will be used in both electronic and paper conveyancing transactions.The introduction of client authorisation requirements for electronic conveyancing will be extended to paper conveyancing. These authorise a conveyancer or legal practitioner to act as a client's agent and sign transaction documents on their behalf.Priority notices will be implemented for paper and electronic conveyancing transactions. A priority notice alerts all interested parties who search the Register of Titles that a lodgement is imminent and provides protection by preventing the processing of other conveyancing transactions affecting the land in question.Land Victoria has called for submissions on the consultation paper by February of next year.