NSW e-conveyancing pack A compilation of e-conveyancing resources to help practitioners with the digital transition Contents Click on the links below NSW e-conveyancing overview e-conveyancing by the numbers NSW e-conveyancing timeline Conveyancing Transformed slides LPI: Priority notices and ects ORG: Restructure and privitisation of LPI, EC implementation & VOI OSR: Digital transformation InfoTrack: End-to-end e-conveyancing tools PEXA: e-conveyancing in NSW Stewart Title: Lodgment gap cover End-to-end e-conveyancing tools An e-conveyancing case study: interview with Claire Martin Useful e-conveyancing links for practitioners in NSW
NSW e-conveyancing overview Electronic conveyancing tools In July 2016, the Minister for Finance, Services & Property, Dominic Perrottet MP, announced the NSW Government s plans to accelerate the transition to electronic conveyancing and progressively phase out paper certificates of title in NSW by July 2019. Technology exists today that allows for all parts of the conveyancing process to be conducted electronically, not only the settlement and lodgment stages. Though these tools enable end-to-end e-conveyancing, practitioners have the flexibility to mix & match electronic and paper to allow for digital transition at a pace that works for their firm. Mobile VOI You can now complete VOI using your mobile or tablet, eliminating the need for photocopying and storing sensitive client information on premises. Mobile VOI is faster, more secure and helps ensure you re taking reasonable steps as required by VOI legislation. Electronic contracts Electronic contracts pull information directly from the Title to ensure greater accuracy and save time re-keying data. Though they re completed online, they DO NOT have to be signed electronically. If you or your client prefers having the hard copy contracts for signing, you can simply print off the ecos. If you d like to continue electronically then you can proceed with SignIT. Electronic signing and exchange Electronic signing allows for a more flexible, convenient and secure process for all parties. Vendors and purchasers can review and sign the contract from any location, and all parties receive a link to final contract once everyone has executed. Electronic signatures have meta data and audit trails that track location and IP address to prove authenticity. Electronic settlement PEXA s platform enables you to lodge documents and complete financial settlements electronically. This reduces the risk of errors and delays, minimises manual processes and paperwork and allows for greater certainty of successful, on-time settlement. For more information on these tools, click here or visit our e-conveyancing page.
econveyancing by the numbers Both the NSW and Victorian governments have announced timelines to transition to 100% digital conveyancing by July 2019. InfoTrack has been touring through NSW and VIC since August 2016 to demonstrate our econveyancing platform and help practitioners begin the transition. Did you know about the July 2019 timeline? only 62% of practitioners are aware of the proposed timeline for fully electronic conveyancing. Are you prepared? What s the biggest hurdle? 64% of practitioners feel that their firm is prepared to complete the full transition over the next two years. 2 in 5 practitioners consider resistance to change to be their biggest hurdle to adopting fully electronic conveyancing. *The three results above are from all attendees who completed a survey. econveyancing roadshows event attendance 100 200 econveyancing in NSW 89,000 ecos ordered by 2,500 firms 3,700 IDfy VOIs completed by 165 firms 300 over 550 econveyancing roadshow attendees in the Melbourne CBD econveyancing in VIC 4,340 s32 & ecos ordered by 745 firms 3,600 IDfy VOIs completed by 120 firms www.infotrack.com.au/econveyancing The history of econveyancing over 750 econveyancing roadshow attendees in the Sydney CBD NOW 2008 enos forms introduced in preparation of econveyancing in NSW 2012/2013 Electronic Conveyancing (Adoption of National Law) Act was passed by the NSW & VIC Parliaments 2013 ARNECC released Model Participation Rules Version 1 2014 Introduction of PEXA June 2016 Claire Martin completed the first fully electronic property transaction in Australia January 2017 First Class Legal completed the first fully electronic conveyance in Victoria July 2019 NSW and VIC governments plan to have transitioned to complete electronic conveyancing
Transitioning to e-conveyancing in NSW For more information about electronic documents see the Registrar General s Directions website. Stage 1 requirements 1 October 2016 A discharging mortgagee or its Representative must lodge a discharge of mortgage signed on or after 1 March 2017, except where the discharge of mortgage is to be Lodged with any other dealing affecting the same folio(s) of the Register. A Priority Notice, Extension of Priority Notice and Withdrawal of a Priority Notice may only be lodged using an ELN (Priority Notices will not be available until a PEXA system release scheduled for 28 November 2016). 1 March 2017 Where there is an ect issued for a folio of the Register, any discharge of mortgage (by a first mortgagee) must be lodged electronically, except where lodged with any other dealing affecting the same folio(s) of the Register. Where the mortgagee is an Authorised Deposit-Taking Institution (ADI), the following must be lodged electronically: discharges of mortgage; and mortgages to which the National Credit Code applies; signed on or after 1 March 2017, except where lodged with any other dealing affecting the same folio(s) of the Register. After 1 March 2016 ADIs will receive an ect when an e-transaction is lodged. ADIs will receive an ect when a paper transaction is lodged. After 1 August 2017
Stage 2 requirements 1 August 2017 The following must be lodged electronically: all mortgages, discharges of mortgage or combinations thereof affecting the same folio(s) of the Register; caveats; transfers, signed on or after 1 July 2018 except where lodged with another dealing affecting the same folio(s) of the Register. Where the mortgagee is an ADI, the following must be lodged electronically: discharges of mortgage; mortgages; or any combination of the above; signed on or after 1 August 2017 except where lodged with another dealing (not being a discharge or a mortgage) affecting the same folio(s) of the Register (where not part of a broader transaction). 1 July 2018 After 1 July 2018 Commence replacement of CTs held by other bodies. Remaining CTs held by ADIs will be replaced with ects (bulk cancellation). By October 2018 1 July 2019 The following must be lodged electronically: all transfers, mortgages, discharges of mortgage or combinations thereof affecting the same folio(s) of the Register, signed on or after 1 July 2019 except where lodged with another dealing affecting the same folio(s) of the Register and that other dealing cannot be lodged electronically. All remaining paper CTs to be cancelled. For more information about electronic documents see the Registrar General s Directions website.
Conveyancing Transformed NSW Regional Roadshow David McDowell Legal Officer econveyancing, LPI
Conveyancing Transformed- NSW Regional Roadshow Priority Notices 3
Priority Notices Notification of intended registration of specified dealing(s) with land Temporarily prevents registration of other dealings (exceptions apply) Gives priority to the registration of specified (unlodged) dealing(s) Automatically removed when ceases to have effect or expired
Legislation The Real Property Amendment (Electronic Conveyancing) Act 2015 introduced Part 7B Real Property Act 1900 Conveyancing Rules (Version 2, issued 28 October 2016) Rule 8.1- electronic lodgment only Available since 28 November 2016
Why lodge a Priority Notice? Effective risk mitigation tool for practitioners Black v Garnock [2007] HCA 31) Big head start in the race to the Register Protection in gaps between exchange and settlement settlement and lodgment (paper) Automatically removed when ceases to have effect or expired Settlements where no CT
Priority Notices- the future without CTs New South Wales is moving to phase out paper certificates of title, and a number of other states have already done so. A Priority Notice will be very useful for parties in the new world without paper certificates of title. After lodging a Priority Notice an incoming party has the assurance required to settle, knowing that that their dealings are protected by the Priority Notice. In the current paper world parties get this assurance from taking custody of the certificate of title at settlement.
Priority Notices Priority Notice will operate for a specified period 60 days (with ability to extend once only for 30 days) during this period will prevent registration (but not lodgment) of most other dealing(s) Recorded on the Register
Folio of the register FIRST SCHEDULE -------------- JOHN CITIZEN (T AY1234566 ) SECOND SCHEDULE (2 NOTIFICATIONS) --------------- 1 RESERVATIONS AND CONDITIONS IN THE CROWN GRANT(S) M 2 AY 1234567 MORTGAGE TO ABC BANKING CORPORATION NOTATIONS ---------------- PRIORITY NOTICES: AZ1234567 EXPIRES 28/1/2017 DISCHARGE OF MORTGAGE AY1234567 TRANSFER TO JANE MARY SMITH UNREGISTERED DEALINGS: NIL
Priority Notices Expect majority to relate to settlement transactions - transfers and mortgages 3 New Forms PEXA fee LPI fee Priority Notice Withdrawal of Priority Notice Extension of Priority Notice $8.80 $33.80 $8.80 $14.00 $4.40 $14.00 All fees are inclusive of GST
Priority Notices A Caveat noted on the Register will not prevent recording of a Priority Notice. A Priority Notice noted on the Register will not prevent recording of a Caveat. A Priority Notice will prevent the recording of a Writ. A Priority Notice does not require a CoRD Holder Consent or the Certificate of Title. Details in the Priority Notice cannot be altered. If the information relating to a transaction needs to be changed then the Priority Notice must be withdrawn and a new Priority Notice lodged.
Priority Notices Priority Notice can be lodged over part of a land title for: one or more lots in an Auto -Consul a lot in an unregistered plan premises (for a lease)
Extension and Withdrawal of Priority Notices The Subscriber who lodged the Priority Notice may lodge an Extension or Withdrawal of Priority Notice. One only Extension for an additional 30 days giving a total of 90 days from the date of its lodgement. The Priority Notice must be current at the time of lodgment of Extension or Withdrawal. An Extension or Withdrawal must be over all titles listed in the Priority Notice.
Dealings not prevented (s74w(2) RPA) a dealing in registrable form lodged before the Priority Notice the dealing or dealings to which the Priority Notice relates a caveat or the withdrawal or lapsing of a caveat a vesting or dealing pursuant to an Order of Court or a provision of a law of NSW or the Commonwealth a Transmission Application by Executors oradministrators anapplication under s12 Trustee Act 1925 a Notice of Death
Dealings not prevented (s74w(2) RPA) a dealing by a mortgagee or chargee (including power of sale) where the mortgage or charge was registered or lodged in registrable form before lodgement of the Priority Notice e.g. Discharge of Mortgage, Transfer of Mortgage, Transfer under Power of Sale etc. a dealing effected by the lessee pursuant to a right conferred by the lease or by or under law where the lease was recorded or lodged in registrable form before lodgement of the Priority Notice, e.g. sub-lease, Transfer of Lease, Mortgage of Lease etc.
Priority Notices- Consent The person who lodged the Priority Notice may consent to the registration of a dealing or plan which is prohibited by the Priority Notice. The consent must be in writing, signed dated and addressed to Land Property Information, NSW. The consent will be filmed with the affected dealing or plan.
Priority Notices- scenarios If there are more dealings in the lodgment case than in the Priority Notice eg, documents listed in the Priority Notice are Discharge of Mortgage and Transfer dealings lodged are Discharge of Mortgage, Transfer and Mortgage then LPI will register all dealings and remove Priority Notice.
Priority Notices- scenarios If there are less dealings in the lodgment case than in the Priority Notice dealings listed in the Priority Notice are Discharge of Mortgage, Transfer and Mortgage dealings lodged are Discharge of Mortgage and Transfer then LPI will send notice (and wait for lodgment of Mortgage, consent, withdrawal of Priority Notice, or expiry of Priority Notice).
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Priority Notices Further Information Registrar General Directions http://rgdirections.lpi.nsw.gov.au/e-dealings/priority_notice Priority Notice Circular http://www.lpi.nsw.gov.au/ data/assets/pdf_file/0016/215431/2016-14_introduction_of_priority_notices.pdf
Conveyancing Transformed- NSW Regional Roadshow ects 23
What is an ect? ect is an electronic Certificate of Title Paper CT is not printed and issued for the current edition of the folio Electronic record on the Folio of the Register The record indicates the party with control of the right to deal 24
Current ect Eligibility Real Property Act amended late 2013 Option to request ect for restricted parties s33aa and 33AB Currently ect is available: to APRAregulated financial institutions, who are subscribers to PEXA or represented by a subscriber to PEXA, and who are the first registered mortgagee. 25
ects Currently ect is only available following registration of new electronic mortgages (optional) Over 30,000 ects issued 1 March 2017- ects to issue to eligible mortgagees from all emortgages 1 August 2017- ects to issue to eligible mortgagees from paper lodgements Major banks looking to bulk convert CTs 26
Title Search ect (CoRD Record) 27
Historical Search ect (CoRD Record) 28
Impacts of ect Impacts everyone in the property industry surveyors, solicitors, conveyancers, financial institutions, lodging parties, etc - not just PEXA users Changes how mortgagees provide consent for all dealings and plans 29
Impacts of ect CT not handed over at paper (or electronic) settlement CT not produced to LPI for subsequent transactions CoRD Holder Consent lodged through PEXA in lieu of CT 30
CoRD Holder Consent Alternative safeguards required to prevent fraud when a paper CT is not issued For edealings - Consent is with the dealings For paper dealings - Consent is lodged separately (standalone) Only require CoRD Holder Consent for dealings that would normally require the CT 31
CoRD Holder Consent Different consent types depending on the transaction: 1. Transacting Party Consent used for settlement transactions 2. Third Party Consent used for subsequent dealings and plans (similar to production) 32
Transacting Party Consent CoRD holder is a party to the transaction CoRD is passed over at settlement Examples: Discharging mortgagee for a DTM Discharging mortgagee for a refinance 33
Third Party Consent Similar to the concept of production CoRD holder is not a party to the transaction Provided to enable registration of a subsequent transaction CoRD holder retains CoRD after registration 34
Conveyancing Transformed- NSW Regional Roadshow ect and paper settlements 35
ect and paper settlements A paper CT is not required for settlement purposes If ect discharging mortgagee lodges a CoRD Holder Consent prior to settlement The consent type is Transacting Party Consent Consent must specify details of the incoming transaction 36
ect and paper settlements Complete Request for Consent eform with transaction details Submit request form to initiate lodgment of a CoRD Holder Consent Available on the Registrar General s Directions with instructions 37
Request for Consent Process 1. Confirm there is an ect 2. Complete the Request for CoRD Holder Consent eform 3. Vendor s representative submits eform to the CoRD holder 4. Check the CoRD Holder Consent before settlement 5. Contact the CoRD holder if details are incorrect 38
Request for Consent Process 1. Confirm there is an ect 39
Request for Consent Process 2. Complete the Request for CoRD Holder Consent eform Request for Transacting Party Consent Purchaser/representative may partially complete and forward to vendor/representative: Clause 4.1 of Contract for Sale and Purchase of Land (2014 Edition) Purchaser must provide details to the vendor of the incoming parties at least 14 days before completion Failure to do so may lead to settlement delays 40
Request for Consent Process 3. Vendor s representative submits eform to the CoRD holder Vendor or representative submits Request to CoRD holder The Request should ideally be submitted with the Discharge Authority Incomplete and/or incorrect requests may lead to processing and settlement delays Example 41
Request for Consent Process 4. Check the CoRD Holder Consent before settlement 42
Request for Consent Process 5. Contact the CoRD holder if details are incorrect Incorrect information in the request must be amended E.g. incorrect dealing types or party names Contact the CoRD holder to arrange a replacement Consent 43
Request for Consent Process- Third Party 4. heck the CoRD Holder Consent 44
Practice issues Contract for Sale does not deal with pct vs ect At settlement, must give good title Acceptance of econsent instead of pct 33AB Real Property Act Alternative to production of a certificate of title (1) A statutory requirement for the lodgment or production of a certificate of title that is imposed in connection with the registration of a matter may, if the relevant folio notes that no certificate of title has been issued, be satisfied by the person recorded in the Register (under section 33AA) as the person having control of the right to deal in the land providing electronic consent to the registration of the matter. 45
Additional Information LPI Fact Sheet - Attending a paper settlement when the Certificate of Title (CT) is in electronic format LPI Circular - 'Optional no Certificate of Title': practice changes for settlement and lodgment of dealings and plans LPI CoRD Video RG s Directions information about CoRD and CoRD Holder Consent requirements Request for CoRD Holder Consent eforms Law Society Journal July 2015, pp 84-5 46
Conveyancing Transformed- NSW Regional Roadshow Benefits of econveyancing 47
Benefits of electronic conveyancing Less requisitions: Dealings are auto-populated with information from the Torrens Register Less data entry errors Dealings are verified before lodgment Title activity checks enables easy monitoring of changes to title e.g. caveats Dealings automatically unsigned if changes are made or if fails lodgment verification
Benefits of electronic conveyancing Eliminates long interactions with banks to arrange settlement Eliminates gap between settlement and lodgment Immediate confirmation of lodgment Earlier availability of cleared funds after settlement No need to physically lodge documents with LPI particularly useful for caveats Easier access for rural and remote communities Can lodge Priority Notices
Conclusion www.lpi.nsw.gov.au/about_lpi/national_econveyancing_nsw http://rgdirections.lpi.nsw.gov.au/e-dealings Sign up to newsletter, inquiries econveyancingnsw@lpi.nsw.gov.au 50
Conveyancing Transformed NSW Regional Roadshow Jan/Feb 2017 Greg Channell Director, Legal/Industry Engagement/Governance Office of the Registrar General
Conveyancing Transformed - NSW Regional Roadshow Office of the Registrar General 1. Restructure and Privatisation of LPI 2. EC Implementation in NSW 3. The Future of Conveyancing 4. Verification of Identity (VOI) Rules 3
Conveyancing Transformed - NSW Regional Roadshow Restructure and Privatisation of LPI 4
Update - LPI structural changes 5
Update - LPI structural changes Office of the Registrar General (ORG) will: oversee the operations of LPI - Titling and Registry Services after sale focus on legislative change and policy administration relating to land registry functions. LPI - Titling and Registry Services Land Registry operations Land and Property Information NSW (Authorised Transaction) Act 2016. Private operator for 35 year Concession Currently in final bid stage 6
Conveyancing Transformed - NSW Regional Roadshow EC Implementation in NSW 7
EC Implementation in NSW e Dealing Lodgment Statistics to 20 Jan 2017 Total Release 1 Lodgments (DMs & Ms) 2923 R2 Dlg Type Totals: DM: 49950 T: 1643 M: 40368 WX: 423 X: 1727 Total Release 2: 94111 PN: 120 Total e Lodgments 97154 9
EC Implementation in NSW TOTAL SOLICITORS (NSW) 985 TOTAL CONVEYANCERS (NSW) 357 TOTAL SOLICITORS (VIC) 115 TOTAL CONVEYANCERS (VIC) 3 TOTAL SOLICITORS (QLD) 58 TOTAL SOLICITORS (ACT) 3 TOTAL SOLICITORS (WA) 9 TOTAL CONVEYANCERS (SA) 1 TOTAL SOLICITORS (SA) 7 TOTAL FIs 59 TOTAL SUBSCRIBERS IN NSW 1597 10
Electronic Caveats Advantages of e Caveats Lodged electronically 7 days pw Often time critical Fastest way to the Register Caveats are effective at Lodgment For Caveats and any dealing - Proof read before lodging 11
Conveyancing Transformed - NSW Regional Roadshow The Future of Conveyancing 12
The future of Conveyancing Conveyancing is undergoing Digital Disruption Digital disruption refers to changes enabled by digital technologies that occur at a pace and magnitude that disrupt established ways of value creation, social interactions, doing business and more generally our thinking. As a result Conveyancing is changing rapidly Some Drivers for change: Electronic Conveyancing- PEXA National Consistency Changes out side Conveyancing Digital Govt; online property marketing; increased accessibility of information 13
The future of Conveyancing Other changes that will impact conveyancing: Uniform National Mortgage (May 2017) - other national Forms? Standard Discharge Authority (PEXA based)?? Electronic contracts and Electronic Vendor Disclosure Fed Govt issues Foreign Ownership register - third party reporting provisions Foreign Resident Withholding Tax Electronic communications with client (PEXA SettleMe) Growth of online property marketing LPI Privatisation 14
Conveyancing Rules Real Property Act Section 12E - The Registrar General may make Conveyancing rules covering, for example: verification of identity and authority, client authorisations, the retention of documents and evidence classes of documents that must be lodged electronically Alternative arrangements for execution and attestation The Registrar-General may refuse to accept or register, or may reject, a conveyancing transaction that does not comply with the requirements of the conveyancing rules [s.12e (9)] 15
Conveyancing Rules Version 1 Commenced 1 May 2016, transition period of 3 months before full compliance was required on 1 August 2016. Introduced: Verification of Identity (VOI) requirements for practitioners Reasonable steps Identity Agents (IDSecure; ZipID; AustPost) VOI Standard (Sch 8 Participation Rules) Verification of Authority (right to deal) Retention of evidence Based on E-Conveyancing and ARNECC Guidance notes apply See: www.arnecc.gov.au 16
A paperless conveyancing future in NSW What s Next? 4 July 2016 - Dominic Perrottet, Minister for Finance, Services & Property said: Across Australia, the future of conveyancing is digital. The benefits are clear, the technology is here, and this is our plan for NSW to lead the way. We are committed to working with all stakeholders to make sure they have the technical capacity, training and resources they need to adapt as conveyancing goes digital. www.finance.nsw.gov.au/about-us/media-releases/first-step-path-paperless-conveyancing 17
NSW - Transition to e-conveyancing Stage 1 Priority Notices introduced as electronic only 28 Nov 2016 Stage 1 will affect financial institutions (ADIs) in 2017 and will parallel measures in Vic and WA Stand alone Mortgages and Discharges by ADIs Refinance transactions Extension of ect issue Implemented in Conveyancing Rules V2 - published on the LPI website. 18
Conveyancing Rules Version 2 Commenced on 26 November 2016 Clarifies some existing provisions Priority Notices must be lodged electronically. [R 8.1] From 1 March 2017 Mortgagees (or their Rep) must lodge stand alone discharges of mortgage [R 7.2] ADIs must lodge electronically all stand alone discharges of mortgage; and mortgages to which the National Credit Code applies; [R 8.2] From 1 August 2017 ADIs must lodge Refinances electronically [R 8.4] 19
Conveyancing Rules Version 2 ect Requirements From 1 March 2017 ADIs will receive an ect on registration of an electronic mortgage (where they are 1st Mortgagee) [R 9.1] From 1 August 2017 ADIs will receive an ect on registration of paper transactions (where they remain 1 st Mortgagee) 20
NSW to Transition to e-conveyancing by mid 2019 Stage 2 - A paperless conveyancing future in NSW Conveyancing Reform Committee The Registrar General consulting with stakeholders to develop a pathway to phase out paper-based conveyancing in NSW by mid 2019. Stage 2 details to be announced shortly All core conveyancing transactions to be electronic Timelines to be confirmed by Minister shortly Paper CTs to be removed completely Committee will continue to meet to advise on implementation 21
Conveyancing Rules Version 3 What to expect in the future Stage 2 of the econveyancing Transition program All mainstream Conveyancing to be lodged electronically by mid 2019 Additional Interim milestones to be announced Client Authorisations for paper Electronic acceptance of mortgages No paper CT by mid 2019 22
NSW - Transition to e-conveyancing A paperless conveyancing future in NSW - Current econveyancing Scope documents to be lodged electronically Discharge of Mortgage Mortgage Transfer Caveat and Withdrawal of Caveat Priority Notice, Extension of Priority Notice and Withdrawal of Priority Notice, CoRD Consents 23
NSW - Transition to e-conveyancing A paperless conveyancing future in NSW Residual Document Strategy Enabling all documents to be lodged electronically By mid 2019 Change of Name, Notice of Death, Transmission Application, Lease, Transfer by Mortgagee, Transfer of Lease/Mortgage 24
Subscriber Compliance Program Section 33- Electronic Conveyancing National Law (NSW) MODEL PARTICIPATION RULES GUIDANCE NOTE 6 www.arnecc.gov.au/ data/assets/pdf_file/0013/212503/mpr_guidance_note_6_ -_Compliance_Examinations.pdf Subscriber Compliance Program is to assist Subscribers in meeting their obligations and responsibilities under the Participation Rules and to build trust and confidence in the electronic lodgement network. Priority Notices must be lodged electronically. Post Registration check 25
Verification of Identity Verification of Identity (VOI) Rules 26
Verification of Identity (VOI) Rules Due diligence requirement to know client Formal VOI requirements currently apply for: mortgagees to identify the mortgagor s 56C Real Property (RP) Act attesting witnesses s 117 RP Act electronic transactions - Rule 6.5 NSW Participation Rules All conveyancing professionals Part 4 NSW Conveyancing Rules (V2) from 1 August 2016 27
Verification of Identity (VOI) Rules Significant fraud mitigation and consumer protection measure Apply to solicitors and conveyancers Formal (standardised) Verification of Identity (VOI) requirements for all conveyancing transactions Consistent national requirements paper and electronic conveyancing 28
VOI - What is required? You must take reasonable steps to verify the identity of your client [R 4.1.2]: either by: applying the VOI Standard (deemed to be reasonable steps) or in some other way that constitutes reasonable steps [R 4.1.4] and ensure the client is a legal person and has the right to enter into the transaction [R4.3.2] Note: Further steps may be required not just ticking the box 29
VOI - Conveyancing Rules R 4.1.5 - When are further checks required? Where you know or ought reasonably to know that: any identity Document produced by the Person Being Identified is not genuine; or any photograph on an identity Document is not a reasonable likeness of the Person Being Identified the Person Being Identified and/or the Identity Declarant does not appear to be the Person to which the identity Document(s) relate; it would otherwise be reasonable to do so. 30
VOI - Conveyancing Rules The VOI Standard - SCHEDULE 8 NSW Participation Rules Requires face-to-face - in-person interview Hierarchy of ID documents, highest possible category must be used Documents must be current (except Passport < 2 years old) Where Documents contain photographs the Identity Verifier must be satisfied that the Person Being Identified is a reasonable likeness (for example the shape of his or her mouth, nose, eyes and the position of his or her cheek bones) to the Person depicted in those photographs 31
VOI - Conveyancing Rules What if you can t meet the VOI Standard Take Reasonable steps You have to judge what is reasonable in the particular circumstances If your client doesn t have full documents consider Category 5 an Identifier declaration - essentially a referee Do what you are able to do if you have done all you can and you are satisfied, in the circumstances, you are likely acting reasonably. 32
VOI - Conveyancing Rules Options for conducting VOI: Do it yourself Do it yourself Using Software solution Use an Identity Agent ZipID IDSecure Australia Post 33
VOI - Useful Links Identity Agents and identity software Australia Post http://auspost.com.au/travel-id/buying-or-selling-property.html IDSecure Pty Ltd http://www.idsecure.com.au/ ZipID Pty Ltd https://zipid.com.au/ Identity Software provider Infotrack https://www.infotrack.com.au/products/disruptive-technology/idfy-voi/ 34
ARNECC Guidance Notes ARNECC has so far published 6 Guidance Notes: MPR Guidance Note #1 Client Authorisations) MPR Guidance Note #2 Verification of Identity MPR Guidance Note #3 Certifications MPR Guidance Note #4 Right to Deal MPR Guidance Note #5 Retention of Evidence MPR Guidance Note #6 Compliance Examinations 35
Questions We have to recognise that the disruption that we see driven by technology, the volatility in change is our friend if we are agile and smart enough to take advantage of it. Malcom Turnbull The digital revolution is here and is ongoing It will change conveyancing in the ways we have discussed and ways we have not yet foreseen The challenge for every one in every sector of the property market is to find the opportunities and benefit from them 36
E-Conveyancing Presenter: Mark Smith Manager Stakeholder & Client Engagement Office of State Revenue January 2017
OSR Digital Transformation NSW Government Policy - 70% of all government transactions will be digital by 2019, now currently 44% Premier NSW Mr Mike Baird Customers of all service providers expect continuous service improvement, and government is no exception. We have a responsibility to deliver the services people need, and we are working to make NSW services easier, faster and more convenient. http://www.itnews.com.au/news/digital-services-make-nsws-premiers-priority-list-409194 Page 3
OSR Digital Transformation Office of State Revenue (OSR) and Land Property and Information (LPI) are part of the Department of Finance Services and Innovation cluster OSR Property Revenue Group - Mission Statement: Creating products and services to transform Property Revenue from manual and paper based processes to fully digital for our customers and agents (red tape reduction) Page 4
What are we doing? All paper/manual processes are being reviewed in collaboration with the NSW Law Society, Australian Institute of Conveyancers and LPI Review payment channels Removal of hand stamps Add new transactions to EDR Allow lodgement of electronic documents with OSR Review of OSR forms and declarations Digital Compliance program Page 5
Advantages of e-conveyancing? Verification of data Electronic Payment Lodgement of Transfer at settlement Payment of Grants Page 6
E-Contracts (ECOS) Assessment and stamping of ECOS through EDR Stamping of Transfer Assessment by a third party (settlement room) Page 7
Further Information E-Conveyancing Phone: 1300 208 528 Email: econveyancing@osr.nsw.gov.au WEB address: http://www.osr.nsw.gov.au/info/e-conveyance Electronic Duties Returns Phone: 1300 308 863 or 1800 086 642 Email: edr@osr.nsw.gov.au WEB address: http://www.osr.nsw.gov.au/info/edr Page 8
Conveyancing transformed
End-to-end electronic conveyancing From the time your client walks in the door to the moment settlement is complete, every step of the conveyancing process can now be conducted electronically. This technology exists today and is already being used by practitioners. This is not BETA software, it is live now!
The end-to-end process Verification of identity Smart contracts Electronic signing Electronic settlement Secure no sensitive client data stored on your device Integrated into the matter Not an empty PDF Matter information is auto populated No delays in the post More secure than paper Better service for your clients Your choice based on your customer requirements Book manual or electronic settlements
It s easier than you think There s no need to be anxious about going electronic our integration enables you to complete the entire process from within InfoTrack. it s entirely your choice which steps you choose to do electronically. we are integrated with all of the following practice management systems: *While InfoTrack does not have any formal partnership in place with LexisNexis, the InfoTrack system may be used in conjunction with Lexis Affinity without breaching the end user agreement. InfoTrack remains committed to ensuring that the InfoTrack System works and will continue to work smoothly with Lexis Affinity.
Verification of identity with There s no need to be anxious about VOI If your client doesn t like mobile phones do a manual VOI! But, if their time is precious and they re concerned about security of their identity documents, use IDfy. It: is integrated into your matter securely stores your client s data, which is valid for 2 years
Electronic signing with There s no need to be anxious about signing If your client doesn t like electronic signatures, print your electronic contract, pop it in the mail, wait for Australia Post to deliver it and scan it back into your matter (everyone loves a scanner!) But, if you don t like waiting for Australia Post and want to have a realtime understanding of where a contract is use SignIT. (not just for ecos, for any document!)
Electronic settlement with There s no need to be anxious about settlement Book electronically through our PEXA integration, or Book manually through the agent you use today, or Book both!
Complete econveyancing Electronic exchange + electronic settlement = econveyancing Electronic end-to-end demonstration
PEXA integration Once exchange is complete you can launch and manage your PEXA workspace within the InfoTrack platform. This is not simply a button that leads to the PEXA website. InfoTrack maps any relevant data into every possible field in PEXA. +
Start the electronic process today Save time Provide new efficient services to your client Choose the process that works best for you Can you use this today? Yes If you haven t already: sign up with InfoTrack today. No lock-in fee, no minimum spend. If you use a practice management system that can be integrated to InfoTrack, request integration - it s free! InfoTrack is built into many of these out of the box systems. Call PEXA - select InfoTrack as your sponsor (or do that today). Secure, fast, easy.
1 CONVEYANCING TRANSFORMED END TO END E-CONVEYANCING HAS ARRIVED
The continuation of digital transformation for the property industry All of industry approach required to transition to 100% electronic lodgements Dual process (paper and electronic) is not attractive we understand the need to shorten the transition period for all As digital accelerates, the remaining paper transactions will become expensive and inefficient PEXA is here to support and help you through the transition 2 CONVEYANCING TRANSFORMED END TO END E-CONVEYANCING HAS ARRIVED
Industry push to turn off paper regulatory changes VIC Bulk Conversion of paper CTs VIC Priority notices VIC NSW WA Refinance transactions AUG 2016 NOV 2016 MAR 2017 DEC 2017 OCT 2016 DEC 2016 AUG 2017 VIC & WA All standalone discharge & mortgages (consumer) NSW Priority notices NSW All standalone discharge & mortgages (ADI s) WA Transfers 3 CONVEYANCING TRANSFORMED END TO END E-CONVEYANCING HAS ARRIVED
E-Conveyancing in NSW 45 financial institutions active on PEXA More than $35bn worth of property has been settled nationally 1317 practitioner firms are active subscribers in NSW More than 370 transactions completed electronically in the month of December in NSW More than 1100 transfers since PEXA was released in NSW in 2014 Highest transactor in NSW (all time): Paul Denny Conveyancing Highest transactor in December: Alternative Conveyancing 4 CONVEYANCING TRANSFORMED END TO END E-CONVEYANCING HAS ARRIVED
Upcoming technology changes & platform enhancements Priority Notices PEXA Projects PEXA Connected PEXA Qualifier Sponsor Integration 5 CONVEYANCING TRANSFORMED END TO END E-CONVEYANCING HAS ARRIVED
Support available in your area PEXA Direct Specialist/Virtual Specialists: Sharon Ladkin PEXA Direct Specialist 0498 018 996 Sharon.Ladkin@pexa.com.au Sally Kite PEXA Direct Specialist 0412 339 481 Sally.Kite@pexa.com.au 6 CONVEYANCING TRANSFORMED END TO END E-CONVEYANCING HAS ARRIVED
Stewart Title enters into strategic partnership to enable PEXA to take lodgement gap cover
Lodgement Gap Cover With the backing of Stewart Title Limited, PEXA will assume responsibility for any intervening instruments or notices lodged by a third party during the lodgement period which have the effect of preventing the registration of the customer s land title dealing or taking priority over the customer s land title dealing once registered.
Lodgement Period explained.. Lodgement Period means the period beginning from the time of receipt by the subscriber of the last successful Title Activity Check (TAC) and ending on the lodgment of the Insured Dealing at the relevant land titles registry.
Action and Cost This cover is applied by default to all settlements completed through PEXA. There is no required action or additional cost to you or your clients.
Additional covered risks covered by Title Insurance - Cover is available to your clients through a title insurance policy which insures against the following risks: Unapproved building work Unregistered easements/covenants Boundary defects/encroachments Claims of possession or interests in land by third parties Unpaid rates & taxes Outstanding orders
Types of Illegal Building Work - Removal of load bearing walls Illegal drainage Addition of rooms in roof space Addition of balconies, decks, pergolas Illegal wiring Conversion of structures into habitable rooms
Ordering a Title Insurance Policy Order a policy through any of the following search providers: Infotrack Global X
Payment of a Policy through PEXA First step is to add a destination financial line item Enter Stewart Title Reference Number
Payment of a Policy through PEXA
Title Insurance A risk management tool for purchasers and solicitors in conveyancing transactions.
VOI Contracts Signing Settlement
2 Contents Integrated conveyancing all under one roof Integration with your practice management system IDfy verification of identity ecos and online certificates SignIT electronic signing PEXA electronic settlement Case study Claire Martin, Head of Property, Kreisson ALPMA/InfoTrack survey results 4 5 6 7 8 9 12 How the industry is responding to change 14 Notes 15
4 econveyancing integration Integrated econveyancing all under one roof Integration Who we provide PEXA integration with * IDfy, InfoTrack s verification of identity (VOI) app, allows you to verify your clients without the need to scan or photocopy documents. InfoTrack provides the 2016 Contract for Sale, authorised by NSW Law Society and REINSW. InfoTrack delivers over 5.5 million certificates annually to our clients with 92% conveyed completely electronically from our clients online orders to the relevant authority. Create a PEXA workspace, with data from your documents brought over automatically, eliminating the need to re-key data. SignIT forms part of the intuitive electronic conveyancing workflow, allowing you to request signatures from the vendor and purchaser, without them needing an InfoTrack account. *While InfoTrack does not have any formal partnership in place with LexisNexis, the InfoTrack system may be used in conjunction with Lexis Affinity without breaching the end user agreement. InfoTrack remains committed to ensuring that the InfoTrack System works and will continue to work smoothly with Lexis Affinity. 5
6 verification of identity ecos 7 1. verification of identity 2. and online certificates Our award-winning VOI application allows you to conduct VOI using your smartphone or tablet. IDfy is programmed to follow ARNECC s guidelines and helps you put in place a consistent process to ensure you re taking reasonable steps to verify the identity of your clients. IDfy can be used in-house, out-of-office or remotely*, allowing you to complete the VOI process in a few simple steps no matter where your client is. 3 easy steps to VOI 1. Take photos of your client and each of their identity documents. 2. Sign the client and verifier declarations directly on your device. 3. Complete the VOI to receive a code to access a secure VOI report. IDfy awards IDfy won Australian Business Awards for New Product and Mobile Innovation in 2016. These awards recognise the transformative nature of IDfy and InfoTrack s commitment to developing forward-looking, innovative, and adaptable solutions to new challenges. Once you ve verified the identity of your client, you can order all of your certificates along with your Contract for Sale in one simple step through InfoTrack. You simply select all of the documents you need on a single screen and the contract will be compiled in the prescribed order and pre-populated with relevant information for you. You then have the ability to edit, re-arrange and upload additional documents. We have some of the fastest certificate return times in the industry as 92% of our orders are automated directly to relevant authorities. Our online HelpDesk isupport also gives you the ability to chase any outstanding certificates and track their progress online with a single click, providing you with transparency and control over your orders. InfoTrack s econveyancing technology is a truly incredible offering that is changing the legal landscape for the better. - Claire Martin, Head of Property, Kreisson *Due to Android infrastructure, IDfy remote is only availble for ios.
8 electronic signing electronic settlement 9 3. electronic signing 4. electronic settlement When you have finalised a Contract for Sale, you simply press the SignIT button to upload it for electronic signing and exchange. We ve partnered with DocuSign to allow for a secure esigning process that enables parties to sign from anywhere in the world as long as they have an internet connection. Once exchange is complete, you can create a PEXA workspace directly from the InfoTrack website. InfoTrack will map all of your matter information directly into the workspace so you don t have to waste time re-keying data. SignIT allows you to send the contract to the parties representatives via a secure email link. On the SignIT dashboard, you can track who has signed the contract and progress is updated in real time. Once everyone has executed the contract, all parties receive a final signed copy of it and electronic exchange can then be completed with the click of a button. DocuSign s technology records meta data and also provides an audit trail report post-transaction to prove authenticity, intent and context behind each signature. VOI Contracts Our integration with PEXA means you can avoid the hassle of printing, collating, scanning and posting documents. You no longer have to rely on couriers and settlement agents to get the job done and you ll save time, reduce errors, and have immediate reconciliation of funds. Being able to electronically prepare and sign documents has truly streamlined the conveyancing process and had such a positive impact in so many ways. - Kylie McArdle, Licensed Conveyancer, Ballarat Conveyancing Signing Settlement InfoTrack s PEXA integration is the final piece of the econveyancing puzzle allowing for a completely electronic and seamless process. From the moment a client walks in the door to the second the transaction is finished, every step can now be completed online.
10 electronic settlement electronic settlement 11 True PEXA integration Create PEXA workspaces directly from InfoTrack with the click of a button. The market has been asking for true PEXA integration for some time integration that allows for a seamless flow of information to PEXA to avoid re-keying data and to streamline the electronic settlement process. This is now a reality with InfoTrack s PEXA integration which maps all of your matter information into the PEXA workspace with the click of a button no need to manually upload csv files. Our PEXA integration allows for truly end-to-end econveyancing all under one roof with greater efficiency, transparency, connectivity, collaboration and service. The integrated workflow pre-populates data, eliminates manual processes, reduces errors, and allows for immediate reconciliation of funds. Using PEXA through InfoTrack, you only have to enter your PEXA password on your first login and all disbursements come under one bill. Manage and launch your PEXA workspaces using InfoTrack s esettlement dashboard. Not registered with PEXA yet? PEXA will help you register; you can start the process using any of the below methods. Make sure to select InfoTrack as your sponsor when you register to be able to create and manage your workspaces from within the matter. w onboarding.pexa.com.au/register e support@pexa.com.au t 1300 084 515
12 case study case study 13 An end-to-end econveyancing case study: Claire Martin Head of Property, Kreisson In June 2016, Claire Martin, Solicitor at Kreisson, made history by completing the first fully electronic residential property transaction in Australia. Using InfoTrack & PEXA s technology, Claire was able to sell her one-bedroom apartment without touching a piece of paper and had the money from the sale in just 10 minutes. Since the transaction, Claire has been inundated with calls from media and fellow practitioners curious to know more about the electronic conveyancing process and how it is changing the way Australians buy and sell property. As the head of Kreisson s property department, Claire has been leading the firm s digital transformation and has seen the momentum shift in the wake of the NSW Government s commitment to accelerate the transition to electronic conveyancing. She has been a PEXA user for some time but was eager to stay ahead of the curve and jumped at the chance to implement a fully digital process when she learned about InfoTrack s econveyancing platform. Claire quickly adopted InfoTrack s ecos and SignIT technologies and began creating and exchanging her property contracts electronically. It was an easy transition and once she tried this new technology there was no looking back as the benefits were quickly evident. Not only does electronic conveyancing save the firm a significant amount of time, it also provides them with additional security in their transactions and improves the conveyancing experience for clients and agents. Instead of spending countless hours manually preparing and exchanging contracts, attending to in-office visits, and waiting on couriers and cheques, Claire and her team can now do everything electronically with a few simple clicks. They now have the luxury of being able to work remotely, from effecting exchange at an auction with the click of a button to having multiple parties sign contracts from a variety of locations, InfoTrack s technology is truly making their lives easier. InfoTrack s econveyancing technology gives Claire the capacity to draft 100s of contracts per month, eliminating an extensive amount of manual and paper work that used to go into each contract. She can prepare a contract and send it to the agent in under an hour. These efficiencies are greatly magnified for Kreisson s developer and off-the-plan clients who can now have a significantly higher volume of contracts issued and exchanged without wasting hundreds of reams of paper. SignIT is also opening new doors with DocuSign s secure esigning technology enabling parties around the world to sign from wherever they are. This is a huge advantage in today s real estate market, where over 50% of property in Australia is being sold to overseas buyers. Claire reckons adoption of econveyancing will pick up quickly as it is such an easy process it simply requires adjusting the typical paper-based legal mindset and setting new habits. Now that she has tried it, there is no looking back - the benefits are undeniable. This process saves Claire and her team a significant amount of time, eliminating a whole array of opportunities for fraud and forgery and allows them to focus on building better quality client relationships through improved service delivery. Claire is a proud proponent of econveyancing and believes transacting electronically is a real sign of the times. She is eager to bring more solicitors, conveyancers and real estate agents on board to continue moving the industry to a truly digital future. There s now a whole new world of online shopping to be part of and Kreisson is right at the centre, continuing to support the quest to bridge the legal industry to technology.
14 survey results notes 15 How the industry is responding to change: ALPMA/InfoTrack survey results Notes The Australasian legal industry is going through a period of significant transformation, impacted by a number of internal and external drivers including customer demand for better value, rapidly emerging technology, reduced barriers to entry and the quest for greater work/life balance. ALPMA and InfoTrack collaborated on a research project to explore how well the Australasian legal industry is responding to this challenge. 163 law firm leaders and managers from a broad cross-section of law firms in Australia and New Zealand shared their views and experience in an online survey conducted in July, 2016. Most firms were working on implementing workflow automation, electronic settlement, customer relationship management systems and improving their approach to performance management. Many firms felt that manual, inefficient and old-fashioned processes were holding them back and believed that there were many ways in which they could change their business processes to operate more efficiently. However, resistance to change from partners and staff continued to be a key barrier to implementing new initiatives. The struggle to keep-up with technology was the most common technology challenge for law firms in 2016. More than 20% of firms were challenged by a lack of in-house IT capabilities, non-integrated systems and a lack of technology investment. While 38% of respondents believed they were at the head of the pack for technology adoption compared to other firms, most firms believed they were in the middle or at the back of the pack. Most process initiatives were only at embryonic stage. While most Australasian law firms surveyed were slowly adapting to the changing legal landscape, a few truly innovative firms were already working on things that are not even in the foreseeable future for most firms artificial intelligence, customer apps, Lean Six Sigma process improvements and legal process outsourcing. Technology more than 1 in 5 More than one in five firms are challenged by a lack of in-house IT capabilities, non-integrated systems and a lack of technology investment. Progress challenges Most firms are working on... Workflow automation Electronic settlement Customer relationship management systems Improving approach to performance management
The InfoCast The A-Z of end-to-end econveyancing InfoTrack sat down with Claire Martin of Kreisson to discuss electronic conveyancing. Claire is a solicitor specialising in property law and she conducted the first fully electronic residential property conveyance in Australia using InfoTrack and PEXA s technologies. Here is a snapshot of her interview; listen to the podcast for the full story. Claire s top benefits of econveyancing Lawyers and conveyancers No counterparts means one single contract and one source of truth. Integration means no more re-keying data - you only have to enter the information once. Real estate agents The option to sign at the auction on an ipad. Deals are locked in quicker with the ability to sign from anywhere. esigning - is it safe? Metadata behind electronic signatures actually provides more evidence to prove authenticity: time location IP address data encryption all backed up by industry-leader How much time does going digital really save? BEFORE 2 people 5 days 200 CONTRACTS AFTER 1 person 50 minutes Vendors and purchasers All you need is an internet connection, making it a flexible and easily-accessible system. Faster access to money from the sale for the vendor. Claire s verdict on econveyancing It s a no brainer. When you re saving hours of time, or days, or sometimes weeks with high volume matters, there s no way you re going back. Listen to the full podcast www.infotrack.com.au/media-centre/podcasts/an-econveyancing-story
The InfoCast The A-Z of end-to-end econveyancing Claire Martin, Head of Property, Kreisson Guest: Claire Martin, solicitor and head of property at Kreisson, discusses her experience with econveyancing and how she is helping her office go digital. Claire has her Masters in Applied Law - Property Law, and completed the first fully electronic conveyance of a residential property in June 2016 using InfoTrack and PEXA s econveyancing technology. Host: Tory Ishigaki has been the Content Manager at InfoTrack since September 2015. Before moving to Australia, she completed an Honours Bachelor of Business Administration, obtained her Juris Doctor and was called to the Bar of Ontario in Canada. She has volunteered in a community legal aid clinic, a legal technology and entrepreneurship clinic, and worked in litigation at the Discipline Department of the Law Society of Upper Canada. Tory Ishigaki: Today I m sitting down with Claire martin from Kreisson to discuss econveyancing. Welcome Claire. Claire Martin: Hi. Tory: Can you tell us a bit about yourself and your background? Claire: I ve worked in the legal industry since 2000 and I started out as a law clerk doing settlements. After 6 years of working in town I went on maternity leave and then moved to working in the suburbs as support staff paralegal. I studied through LPAB and I took another year off when I did my final law subjects with college of law full time and now remain at the firm that I did my PLT days with Kreisson, which is a building and construction law firm and I head up the property department. Tory: You recently completed your masters in property law, are heading up the property department and wrote your thesis on the impact of technology in conveyancing which is a pretty pertinent topic at the moment. Can you tell us a bit about the research that you did, how the conveyancing process is evolving and where you see the future of the industry? Claire: Sure. I recall being at the OSR doing settlements the day before GST was coming in in 2000 and it was absolute chaos. There were people screaming, climbing over each other, paper and cheques were going everywhere. There just had to be a better way and there were rumours around at that time that settlements were going to come in and about a decade later of trial and error we ve finally got there so it s only going to get better from here on in. Kind of like when the ASX changed from chalkies to online trading; it takes time but eventually it ll become the norm. Also, in April 2015 I had a client buying a property in Austin and she emailed me the electronic contract and we went through it in Sydney, she docusigned it and she entered into a transaction to purchase a property in Austin Texas from Sydney. That was kind of the first thing I saw towards how far the tech was going worldwide. Some of my research indicated that over 40% of property transactions in the US are being docusigned. Tory: Wow already. Claire: Yeah, so a few months later I heard about Steve Healy at Gadens, he had done the first electronic exchange of contracts in Australia. Shortly after, Mark Morgan at Colin Biggers had done an off-the-plan launch as well, so these were the start of the electronic exchanges and signatures in Australia. So this kind of cemented what topic I was going to select for my thesis. Tory: And you actually completed the first fully electronic residential property transaction in June of last year so I m assuming that was off the back of that progress and doing your research. Can you tell us the story about how that came to be? 1