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From the CEO: Conveyancing in the 21st century

Every Issue

Cite as: (2005) 79(7) LIJ, p. 6

E-conveyancing is set to revolutionise the way property lawyers conduct their business.

The Law Institute of Victoria (LIV) is currently involved in two important conveyancing issues. In the first issue, the LIV has responded to the Regulation of Conveyancing in Victoria discussion paper, which was prepared by the Allen Consulting Group report on behalf of the state government. The LIV’s submission calls for extensive regulation of non-lawyer conveyancers in Victoria. It is expected the Victorian Consumer Affairs Minister Marsha Thomson will make a recommendation to Cabinet in relation to the regulation of conveyancers in Victoria in the next couple of months.

Running parallel with this review of conveyancers has been the electronic conveyancing (e-conveyancing) project.

E-conveyancing will be one of the most significant changes to the way in which property lawyers conduct their business. Underpinning the electronic system is the capacity of the parties’ representatives to be able to electronically sign on behalf of their client and, therefore, the management of electronic signatures is critical.

Subscribers to the system, that is the lawyers or conveyancers acting on behalf of a purchaser or vendor or financial institutions, will need to obtain a digital certificate.

The current proposal is the use of a digital certificate known as an Australian Business Number – Digital Signing Certificate (ABN-DSC). There will also be minimum insurance requirements, a need to hold a VOTS regular customer code from Land Registry and to subscribe to the e-conveyancing system rules.

While it is called an e-conveyancing system, it is probably better described as an electronic settlement program as it allows electronic funds transfer and electronic lodgment of documents. It does not alter the way in which disclosure statements and contracts of sale are negotiated and executed, rather it is at the post-contract phase where the system provides considerable improvements.

The e-conveyancing program will operate through an electronic lodgment file (ELF). ELF is a piece of cyberspace which allows all parties to a transaction to enter information and provide data. Typically, the participants will be the vendor’s representative, the purchaser’s representative, vendor’s mortgagee and the purchaser’s mortgagee. Each party will have access to the ELF and can provide detailed data about the transfer or transferee and mortgagee and discharge details.

No physical settlement is required as the parties to a transaction complete the necessary information on an ELF and set a time for electronic settlement. If all parties have completed all the matters required and given their authority, the transaction will proceed.

On successful completion of an electronic settlement the purchaser can elect for the issue of an electronic certificate of title; paper titles will not be necessary but are still an option.

It should be remembered that government has made it clear that participation in e-conveyancing is not essential and the paper-based system will still continue. Much will depend on the endorsement of the financial institutions.

New Zealand and Canada have both introduced electronic title registration systems. In one Canadian province, the law society, on behalf of its members, has been active in facilitating the provision of digital signatures. This is an important role that the LIV can play on behalf of its members.

LIV Advocacy and Practice manager Natalina Velardi and a representative of the NSW Law Society last month went to Canada to meet with law societies, practitioners and registrars of title to investigate the role of Canadian law societies in the e-conveyancing programs. The aim of this trip was to see what arrangements could be introduced in Victoria to assist members of the legal profession in moving to the electronic environment. Ms Velardi will report to the LIV Council this month on the issue.

It is a positive move to see the LIV and the NSW Law Society working together in tackling significant issues facing our profession with the introduction of electronic commerce in conveyancing. We aim to continue our interaction with the NSW Law Society on this issue.

The electronic environment is a significant change in conveyancing.

The LIV has done much work and devoted a lot of resources to the consultation process to date and the next six months will be critical in ensuring that the legal profession makes a smooth transition to the new environment.

John Cain

ceo@liv.asn.au

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