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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?
Webinar: Your Econveyancing Questions Answered
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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
Webinar: Your Econveyancing Questions Answered
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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
Webinar: Your Econveyancing Questions Answered
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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?
Webinar: Your Econveyancing Questions Answered
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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?
Webinar: Your Econveyancing Questions Answered
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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
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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?
Webinar: Your Econveyancing Questions Answered
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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?
Webinar: Your Econveyancing Questions Answered
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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?
Webinar: Your Econveyancing Questions Answered
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Digital signatures
What are digital
certificates/ signatures?
What is the effect of signing a
transfer on behalf of a
seller/buyer?
Subscriber Certification
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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
Webinar: Your Econveyancing Questions Answered
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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?
Webinar: Your Econveyancing Questions Answered
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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!
Webinar: Your Econveyancing Questions Answered
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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?
Webinar: Your Econveyancing Questions Answered
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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?
Webinar: Your Econveyancing Questions Answered
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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?
Webinar: Your Econveyancing Questions Answered
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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?
Webinar: Your Econveyancing Questions Answered
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Costs
What is the cost
to use PEXA?
PEXA fees
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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
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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
Webinar: Your Econveyancing Questions Answered
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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
Webinar: Your Econveyancing Questions Answered
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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
Webinar: Your Econveyancing Questions Answered
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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
Webinar: Your Econveyancing Questions Answered
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Do I have
to use
PEXA?
Will PEXA
become
compulsory in
the future?
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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