The WA land registry, Landgate, has announced a timeline for taking property transactions online, with a view to 100 per cent of transactions going digital. Deadlines for implementation of online transaction requirements apply to WA settlement agents in August, October and December 2017 for phasing in mandatory electronic settlements.
Property Exchange Australia – PEXA – is the system that has been built as an outcome of collaboration between Government and private stakeholders to complete electronic settlements and lodgements, including full integration with Government land registries.
Lisa Dowie, PEXA’s Chief Customer Officer and Licensed Real Estate Agent, and Kewdale-based Settlementswa.com Pty Ltd owner Raelene Bennett say there are benefits for both real estate agents and settlement agents.
Raelene says, “When times are hard the electronic system can help. It costs money each time to have agents run back and forth to Landgate and banks on St Georges Terrace. Now that I’m settling electronically I no longer need to engage an external clerk or other out-sourced assistant.
“Unlike with paper settlements, when you go electronic you know that the documents are correct. The documents have to be correct or the system won’t proceed. There are two to four parties in PEXA’s electronic workspace – two settlement agents and the banks – checking all the documents and that the financials are in order prior to the final transaction. Everything must balance to the last cent. Practitioners not using PEXA’s digital platform need to take a deep breath and calm down. Everything adds up.
“With a manual settlement you might have done everything right but one of the lenders might have a problem with the discharge of mortgage. Even if there’s an error that presents in the electronic workspace, the transaction gets pushed forward to the next hour so that the documents can be fixed – plus there’s no running around to get the client to fix this up. Any problems are easily and quickly rectified.
“It is important to recognise that fact – that things can go wrong with settlement – but it is the speed of rectification that is key to all parties involved in the transaction. Some issues are unique and can only be solved once they present so, rather than trying to imagine a faultless system, it is better to think of PEXA as a smart and adaptive solution that is agile enough to cope with the many variables that can come into play during the settlement process.”
Raelene adds, “Not all settlements are the same. You can never iron out every little error as property transfer is complex. My advice is don’t worry. The PEXA support service is there to help. If there’s a deadline and people cooperate they will sort out the little hiccups.
“You can’t have a set of criteria on what will crop up. For example, the financing details for customers are unique. With one settlement on PEXA – in Bunbury and Perth – I helped the other side through the transaction. At the time it was stressful, but the next time that the matter arises we will know what to expect and troubleshoot.
“There’s nothing that can’t be overcome. PEXA is evolving as more people use it. Settlement rules, regulations and legislation change constantly and we have to adapt – it’s a lesson in change.”
Raelene is an agent who has seen plenty of change, both in the real estate and settlement aspects of a transaction. She recalls similar objections and themes when the Office of State Revenue went online.
“As an industry we need to get used to change, whether we like it or not. When I started out I saw the arrival of the computer era as quite threatening. I remember past days of lodging contracts with revenue online at the Office of State Revenue (OSR). Back then no one wanted to use the OSR system. There were a few problems at first that were later ironed out, but now everyone is on board. I can tell you that there is not one person who wants to go back to the days of spending hours at the Office of State Revenue waiting for stamping.”
According to PEXA, e-Conveyancing is currently live in five states and is a collaboration between many industry participants, including financial institutions, settlement agents and land registries. Funds settle through the Reserve Bank of Australia (RBA).
Lisa says, “PEXA is committed to supporting the property industry as it transitions towards a 100 per cent digital future. Regulatory timelines exist across WA, SA, Victoria and NSW as they transition to digital property transactions.”
The first stage of WA’s transition happened on 1 August 2016, with all Authorised Deposit-Taking Institutions (ADIs) and their representatives now lodging standalone mortgages (subject to the National Consumer Credit Code) and discharge of mortgages electronically. In 2017 the following dates and corresponding transformations will be implemented to reach 100 per cent online transactions.
Raelene perceives the push to turn off paper as a move in the right direction, saying, “The regulatory timeline for digitising property transactions is long overdue. For example, in the case of putting clear title cash settlements through the electronic system by 1 October 2017 – how difficult will that be?
“The more settlement agents who use the system the more savvy they will be. Or if this doesn’t seem straightforward for agents then they can contact a PEXA support team member who can help out. The mandate timeline is a good thing, otherwise we’ll procrastinate as an industry and miss out on the benefits and savings that come from using the system.”
Western Australia timeline for digitising property transactions
1 August 2017
- All commercial standalone mortgages will need to be lodged electronically by ADIs
- Refinance transactions in WA must be lodged electronically (ADIs and non-ADIs inclusive)
1 October 2017
- Eligible standalone transfer transactions, caveats and withdrawal of caveats will need to be lodged electronically in WA
1 December 2017
- Any lodgement case containing eligible* discharges, transfers, mortgages, caveats and withdrawals of caveat will need to be lodged electronically in WA, regardless of whether the mortgage is consumer or commercial.