your e-conveyancing questions answered...webinar: your econveyancing questions answered 1 your...

Webinar: Your Econveyancing Questions Answered

1

Your E-conveyancing Questions

Answered

Matthew Raven, Partner, Gadens

Professor Sharon Christensen, QUT and

Consultant, Gadens

Session Overview

How do I register with

PEXA?

What is PEXA and how

does it work?

What are the risks for

my practice and how

can I manage them?

What will be the practical

changes when I’m acting

for a party to a convey-

ancing transaction?


2

What is PEXA?

What is PEXA?

“PEXA allows an online workspace where land registry

documents and a settlement schedule can be created

and shared with all parties. It also automatically lodges

documents with the land registry, exchanges loan funds,

pays stamp duty and other third party beneficiaries,

removes the need for bank cheques and removes the

need to physically be at settlement.”

- Property Observer, 28 June 2014


3

What is PEXA? (contd)

Outside PEXA

• Contract preparation and

signing

• Advice to client on the

transaction

• Searches

• Calculate adjustments

• Stamping

In PEXA

• Preparation/signing of transfer

documents

• Book settlement

• Obtain payout figure

• ‘Virtual’ settlement

• Electronic transfer of funds

• Lodgement/registration

What will a typical transaction look like?

• Client authorisation and VOI

• Create workspace

• Select Role (“Proprietor on Title”)

• Title reference

• Client details

• Nominate settlement date and

time

• Invite participants

• Complete transfer/form 24

Seller’s lawyer

LTO Verification

Buyer’s lawyer

• Client authorisation and VOI

• Accept invitation

• Confirm title details

• Select role (“Incoming Proprietor”)

• Invite mortgagee

• Complete transfer/form 24


4

What will a typical transaction look like?

• Source funds

(amount of advance)

• Source accounts

• Stamp duty verification

• Digitally sign transfer and

financial statement

Seller’s lawyer

Buyer’s Bank Seller’s Bank

Buyer’s lawyer

• Payout figure

• Destination accounts

• Digitally sign transfer and

financial statement

Financial settlement

and lodgement

Can I see a demo?


5

Who starts the

process in PEXA?

What happens when

there’s a paper title in

existence?

Can someone else start

another transaction in

relation to the same title?

Does the system

recognise if 2 parties don’t

load the same information

in relation to a

transaction? (Do people

load their property

information in separately

as a double check or do

you just confirm

information loaded by the

first person who loaded

their information?)

Is it going to be easier to

overlook the transfer of a

second lot if the sale

includes more than one lot?


6

Would PEXA be acting as the

agent for the buyer or the

seller?

Can self acting parties

use PEXA?

What if a dealing is lodged on

the title after the workspace is

created?

Client Authorisation and VOI


7

Client authorisation and VOI

If I have a general

power of attorney for

some of my property

developer clients for

the purpose of signing

seller transfers. Will

this mean a client

authorisation is not

necessary?

Can you still maintain the

procedure of having the

client sign the transfer and

not having authorised

lawyers sign?

VOI

What constitutes reasonable

steps to identify my client?

Do I have to meet

the client face to

face?

Can I do a face to face

VOI using Skype or

similar technology?


8

VOI

How do I identify a

client in China?

What if the client is a

company?

I act for developers. Do I

need to get a client

authorisation signed and

redo the VOI for each

transaction?


9

Using Subscriber Agents for VOI

• You are liable under the MPR for

any failure of a Subscriber Agent to

take reasonable steps in conducting

a VOI

• Your agreement with the Subscriber

Agent includes exclusions and

limitation of liability (including per

claim and annual aggregate

maximum)

Right to Deal

What constitutes

reasonable steps

to establish a

client’s right to

deal with they

property?


10

Digital signatures

What are digital

certificates/ signatures?

What is the effect of signing a

transfer on behalf of a

seller/buyer?

Subscriber Certification


11

The ‘Attribution Rule’ Electronic Conveyancing National Law (Queensland) Act, s12

• Digital signature is binding on all parties and the

registrar unless repudiated

• Repudiation permitted where:

• Not created by the subscriber, an employee or a

person with express or implied authority AND

• Not due to a breach of the participation rules or

failure to take reasonable care

• Registry instruments may be unsigned prior to

settlement

Release 2 Payment Settlement: Process Overview

22

Title Activity

Check

(1hr Prior)

Lan

d R

egis

try

PEX

A

Lodgement

Case Status

Advice

Sub

scri

ber

Settlement

Preparation

Funds

Reservation Lodgement

Funds

Exchange Disbursement

Stamp Duty

Verification

Verify

Funds

Availability

Set Commitment

to Pay SRO

R

BA

Reserve

Source FI

ESA Funds

Exchange

Funds Between

ESAs

Sign

Schedule

FI

Stamp Duty

Verification

(1hr Prior)

Debit Trust

Account

Move Source

Funds to

Clearing Acct

1 2 3 5 6 4 7

Disburse

Funds to

Beneficiaries

Authorise

funds

Workspace locking Settlement and disbursement of funds

Vic only Workspace locked


12

What happens when everything is

set for a settlement and then, at

the last minute, the purchaser’s

solicitor becomes aware of

something that entitles the

purchaser to terminate or they

wish, for other reasons, to seek to

defer settlement? How long

before settlement do you have to

cancel the transaction and how is

that done?

What happens if I get instructions

not to proceed after the

nominated time for settlement but

before PEXA shows settlement

has occurred. Is there a big red

button to stop the process?

How do you tender for

settlement if the session is

terminated at the last

minute on the settlement

date?

What if PEXA goes down in the

middle of a transaction, gets

overloaded or malfunctions?

What happens if my

computer system goes

down in the middle of a

settlement?


13

When is settlement

deemed to have

occurred where the

funds get lost?

What happens if the funds

get deposited into the

wrong account?

By far my biggest concern at the moment is in relation to funds. I

recently directly deposited some money to my brother’s bank account

using online banking. It bounced back many days later despite having

the correct account number. The bank was not able to provide me with

any reason as to why this occurred. So I can say, with certainty, that

internet banking has its issues. What PEXA are proposing we rely on is

funds coming out of our trust account (using online banking), then

through PEXA software to another bank’s online banking facilities. I

can’t see anything going wrong there!


14

What happens when

funds are coming

from a number of

sources, including

bank cheques on the

day of settlement?

How are keys and

tenancy documents

dealt with if there is

no physical

attendance at

settlement?


15

Can I use PEXA if my firm

doesn’t have a trust

account?

Does the system allow for

a positive rates

adjustment to be made

when rates haven’t been

paid and then a cheque

drawn in favour of the

Council so that your client

can get the discount

before the discount period

ends?

How are local authorities

paid from settlement

monies?


16

How does PEXA deal with

contemporaneous

settlements and linked

settlements?

I understand there will still be

an option to settle if PEXA

indicates the titles office is

offline. What are the risks of

this and what do I need to do?

Changes to the standard contract

Do I need to make sure

there are special

conditions in the contract

to allow PEXA to be

used?


17

Changes to the standard contract

• Agreement to use electronic settlement

• Completion of workspace

• Deemed compliance with obligations to

provide transfer and bank cheques

• ‘Ready willing and able’ in an electronic

environment

• Payments to authorities

• Unavailability of computer system

• Withdrawal from electronic settlement

Stamping

Are OSR

declarations part of

the PEXA system?

Can duty be paid

through PEXA to

OSR without using

OSR connect?


18

Costs

What is the cost

to use PEXA?

PEXA fees


19

How do I register for PEXA?

PEXA On-boarding Process

• QLS approval for EFT

• Complete on-line application form

• Provide supporting documentation

• VOI

• Sign Participation Agreement

• Apply for digital certificates


20

PEXA On-boarding Process

Things to think about before getting started:

• Compliance with the PEXA Security Policy

• Virus and firewall protection

• Security of digital certificates and passwords

• Managing invitations and notifications

• Allocation of roles within PEXA

• Appropriate staff training


21

Sponsors

Can I connect my

existing

conveyancing

package to PEXA or

will I have to re-

enter data in PEXA

every time?

Do I have to use a

sponsor?

PEXA Sponsors


22

Risks and Mitigation

What is the

risk?

What about fraud and

our trust accounts?

Who is the responsible

party if something goes

wrong?

Is PEXA secure?

Risks and mitigation

• Understand your obligations under the MPR and PA

• System security

• Digital certificate security

• Consider internal roles and safeguards

• Multiple signatories?

• Monetary limits?

• VOI and right to deal

• Liability for ‘Subscriber Agents’

• Liability caps


23

Risk and mitigation (contd)

• Understand how the system works

• Changes to conveyancing practice and procedures

• Changes to standard contract

• Obtaining client authorisation

• Procedures for cross checking data entry

• Consider requiring third party payments into trust

• Procedures for dealing with last minute notifications (eg

dealings lodged, party unsigning, system failure)

• Check search where no TAC carried out

• Don’t just “leave it and walk away” - check ‘ready’ status

shortly prior to settlement and monitor settlement

PI Insurance

• No changes proposed to policy wording

• Lexon provides indemnity for claims

arising from the provision of Legal

Services by the Insured

• This will include PEXA use and VOI

• Exclusions:

- contractual liability

- dishonesty (eg certification)

• Additional requirements in Conveyancing

Protocol


24

Do I have

to use

PEXA?

Will PEXA

become

compulsory in

the future?


25

Where to find what you need to know

• Model Participation Rules

• Client authorisation www.arnecc.gov.au

• Participation Agreement

• Service Charter

• PEXA Security Policy

www.pexa.com.au

• Application for Approval to Make PEXA EFT

Trust payments

• QLS PEXA Guidelines (coming soon) www.qls.com.au

Questions

http://www.arnecc.gov.au/

http://www.pexa.com.au/

your e-conveyancing questions answered...webinar: your econveyancing questions answered 1 your...

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