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For all the information and updates you need about the transition to 100% digital lodgement, read the latest news here.

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View the professional development activities offered by the LIV to provide guidance to you regarding the changes.

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We have compiled useful resources and information to assist you in understanding and adapting to the changes.

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About

In early 2017, Land Use Victoria (Victoria’s land registry) announced a timetable for the transition to 100% digital lodgement. By 1 August 2019, with very limited exception, all transactions must be lodged electronically. This will apply to practitioners and conveyancers acting for a party or themselves, and mandates the use of electronic conveyancing.

The Law Institute of Victoria is committed to assisting its members understand and adapt to the changes in the lead up to 1 August 2019 and beyond, through written resources and tailored professional development.

Land Use Victoria, in its Customer Information Bulletin 163, announced the timeframes for transition to 100% digital lodgement (100% Digital). The project involves the progressive roll-out of a number of different requirements over the next two years, such as in relation to client authorisations, certifications, and the introduction of a national mortgage. 1 August 2019 is the date by which all transactions are to be lodged electronically, and the use of electronic conveyancing will be mandatory. As a consequence, paper lodgement will no longer be possible This will apply to all conveyancers and practitioners acting for a party or themselves and PEXA subscribers.

In Victoria, 100% Digital is supplemented by the Registrar’s requirements for paper conveyancing transactions (Registrar’s Requirements). The Registrar’s Requirements aim to align the requirements for paper conveyancing transactions with those for electronic conveyancing transactions, and specify timeframes for the commencement of various requirements for paper conveyancing transactions which mirror those determined for the 100% Digital.  

The mandatory uptake of electronic conveyancing for practitioners introduces a range of commercial and regulatory pressures. The LIV understands that practitioners will be required to apprise themselves of the necessary knowledge and acquire the required skills in order to make critical and informed decisions regarding the future of their practice in this area, particularly with respect to the risks, legal obligations, costs, and impacts on current practices and procedures. The LIV has developed a range of resources for the benefit of the profession, and is currently in the process of constructing an education campaign to ensure that practitioners are suitably equipped to adhere to Land Use Victoria’s timeframes.

Upcoming Activities

  • Transition to 100% Digital Conveyancing VIDEO

    This video is designed to provide you the essential information you need to know as a property lawyer working in 2017 and beyond. You will learn the step-by-step details of what changes are coming into effect, what you need to do to prepare and how you can remain compliant during the transition.



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Frequently Asked Questions

  • Introduction to the FAQs

    On 25 October 2018 the Law Institute convened a panel discussion on e conveyancing. Practitioners were invited to direct questions to representatives from key organisations.  Justin Schmitt, Chief Transformation Officer, PEXA, Lisa Dowie, Chief Customer Officer, PEXA, Paul Jefferson , Executive Director, Land Registry Services, Land Use Victoria, Paul McKee, Digital Duties Program Leader, State Revenue Office, Emma Elsworth, practitioner & LIV accredited specialist in Property Law generously gave their time and expertise as panel members. Simon Libbis, LIV Council member, LIV accredited specialist property law and member of the LIV Property and Environment Law Committees.  chaired the panel discussion.  The LIV thanks each of them most sincerely.

    FAQs based on the panel discussion are now available (insert link). The FAQS have been reviewed by all panel members as well as our panel chair. The FAQs will be reviewed and added to as we receive queries from members, and as new e conveyancing providers enter the market.

    Email practicesupport@liv.asn.au or telephone our LIV Practice Support team on 03 9607 9378 if you would like to propose questions for inclusion in future FAQs on this topic.

  • 1. Will practitioners be provided with an opportunity to 'opt out' of PEXA at some time in the future?

    1.1  As new approved operators of electronic lodgement networks enter the market, practitioners will have a choice. Practitioners can only use approved Electronic Lodgement Network Operators (ELNO) when conducting e-conveyancing.

    1.2  Property Exchange Australia Ltd (PEXA) and Sympli are currently the only approved Electronic Lodgement Network Operators (ELNO) to provide an Electronic Lodgement Network (ELN). This approval is provided by the Australian Registrars National Electronic Conveyancing Council (ARNECC), for those approved ELNO’s to collaborate electronically on the preparation of and lodgement of registry instruments, the financial settlement and exchange settlement funds with approved financial institutions and the lodgement of instruments with the Victorian land registry to complete conveyancing transactions.

    1.3  ELNO’s are then approved by the Registrar in each State and Territory to operate in that jurisdiction.

  • 2. What is the current (as of 25 October 2018) percentage of lodgement in paper versus through PEXA?

    2.1  As at 25 October 2018 a total of 83% of lodgements at Land Use Victoria (LUV) were completed electronically.

    2.2  Within the next year, the LUV anticipates another 140 categories of transactions will be lodged electronically.

  • 3. Why is it necessary to rewrite the General Conditions in the Contract of Sale of Real Estate and substitute them with the appropriate Special Conditions to reflect PEXA’s current position in which there is no guarantee of settlement on nominated days and times?

    3.1  The LIV is rewriting the LIV Contract of Sale General and Special Conditions to reflect electronic lodgement processes. Until that is complete, rewriting the General Conditions to substitute them with the appropriate Special Conditions as noted above is recommended to reflect current electronic lodgement processes.

    3.2  Settlement times in PEXA
    When processes are not completed in a timely manner – for instance, PEXA participants not signing a document, a mortgagee not confirming a payout figure as a destination line item until the day or morning of settlement, resulting in a delay in balancing other destination line items for the net sale proceeds – this can effect the date and time of settlement. If a settlement time is missed, rather than the entire settlement being delayed to another date entirely, settlement is rescheduled or rolled over in 30 minute intervals.  Previously settlement times were rolled over in 90 minute intervals.

    Settlement should only be delayed if it is agreed in writing in accordance with property conveyancing practices and conventions, not unilaterally. Otherwise, all other delays are dealt with under the usual general conditions where all parties must be ‘ready, willing and able’ to settle on the scheduled date stipulated in the contract of sale.

    Electronic processes clearly indicate where a party is ‘ready, willing and able’ to settle, or where the other party isn’t ready to complete settlement and as a result are at fault for delaying settlement, for example not completing the required electronic processes.

    PEXA’s Participation Agreement is clear on the issue of liability where settlement is delayed as a result of PEXA errors.   It may be necessary to notify the party at fault why settlement could not occur, in writing and via a PEXA conversation, should the failed settlement become litigious.  

  • 4. How does a purchaser tender if the vendor refuses or is unable to effect settlement, particularly if the vendor has failed to initiate both Duties Online and PEXA?

    4.1  A Purchaser may tender through the ‘Conversations’ tab on PEXA. Doing so will create a record of that action that may be referred to if a dispute arises.

    4.2  The PEXA platform and Duties Online record the date and time a required electronic conveyancing process is completed. In the event of a dispute, records kept by PEXA and the State Revenue Office (SRO) can be referred to in order to establish a timeline of events. For example, when an invitation to accept the Duties Online Transferee form was sent, and the date it was signed by the Vendor(s) and Purchaser(s). This may identify the defaulting party in a conveyancing transaction.

    4.3  PEXA has an in-built audit trail of all activity that occurs in any given workspace, which is not immediately visible to all parties. The audit trail identifies who has or hasn’t initiated the requisite activity in order to have the PEXA workspace to the point of a ‘ready’ status so that settlement may be completed.

  • 5. In commercial conveyancing, properties are often sold subject to leases, the original of which are required to be physically handed over at settlement as well as any transfers/variation of leases, disclosure statements, and so forth. Could this be completed in PEXA and, if not, why?

    Could this be completed in PEXA and, if not, why?

    5.1  Where manual processes need to be completed outside of the ELN, arrangements should be made to collect the manual documentation after the workspace has been completed.

    5.2  Lawyers and conveyancers are versed in their clients ‘duty to cooperate’ to have all the necessary conditions satisfied when purchasing a property. Therefore, parties should not withhold original documentation for example, leases, or water rights transfers from the settlement, if the workspace is not yet complete.

    5.3  The Purchaser’s legal representatives have a legal right to inspect the original documents prior to settlement and therefore arrange with the Vendor’s Solicitor to collect those documents once settlement is complete. It is prudent to check all original documents to be handed over in the days prior to settlement and before the transaction workspace completes.

    5.4  Whether this manual process can be dealt with electronically is an issue the LIV will continue to follow up.

  • 6. What is the situation regarding residential properties (particularly, off-the-plan) where payment of the deposit may be by way of bank guarantee and the bank/purchaser requires the actual bank guarantee to be handed over at settlement?

    6.1  Where payment of the deposit is made by way of a Bank Guarantee, it must continue to be dealt with outside of PEXA. However, at the time of settlement, the Vendor should ensure that the original bank guarantee is held by the appropriate stakeholder which is normally the Vendor’s conveyancing representative, in accordance with the Sale of Land Act.

    6.2  Post-settlement, the original guarantee should be returned to the Purchaser or their conveyancing representative.

    6.3  Should the Purchaser require secured monies (or assets) to be released in order to complete settlement, then as with a paper settlement, the Purchaser must, before settlement:

    1. make arrangements to provide a replacement deposit into trust;
    2. collect the original bank guarantee from the vendor;
    3. arrange for the original bank guarantee to be returned to the bank and the funds or assets underpinning the guarantee to become unsecured; and
    4. complete the necessary arrangements for settlement, including satisfying the necessary outstanding finance requirements prior to settlement.

    This process ensures that the original bank guarantee is satisfactorily provided to the bank prior to settlement, so that finance can be drawn down from the loan funds at settlement.

    6.4  Where there is a refinance transaction, where a Bank Guarantee is provided for payment of the deposit, and the original guarantee cannot be provided to the Bank prior to settlement, Land Use Victoria will accept this transaction in paper by providing a ‘Request to accept paper lodgement, requesting a paper lodgement of a transaction(s) that, on face value, should be completed using an ELN.

    6.5  All parties to the transaction must determine when a transaction cannot be lodged using an ELN. However, it is the lodging party who must present the request form at lodgement. When presented, Land Registry staff will accept the transaction(s) and proceed to examination.

  • 7. Some practitioners have reported conversations with PEXA representatives noting that certain features of PEXA not currently available in Victoria were being ‘road tested’ in New South Wales, namely the PEXAPlus ‘marketplace’ version of the PEXA platform. Could PEXA please elaborate on this?

    7.1  PEXA works with each state Land Registry and State Revenue Office to agree on a roadmap for delivering new services and technology when available. An example is the PEXA+ workspace.

    7.2  Experienced jurisdictions may test new technology advancements slightly ahead of others in the delivery of the PEXA roadmap. These new services will eventually be rolled out to all jurisdictions, however it is PEXA’s position is that new technology and/or services are first tested in particular jurisdictions to ensure their viability and success when implemented Australia wide.

  • 8. Practitioners have observed that the interaction between the State Revenue Office’s (SRO) Duties Online Form and PEXA is ‘clunky’ and ‘cumbersome’, particularly in relation to the category of complex transactions. What steps is PEXA taking to improve the integration and communication between it and the SRO?

    8.1  The SRO and PEXA work together to make improvements to both platforms and in the delivery of their roadmap of services to be implemented.

    8.2  The digital duties form was originally released on 1 July 2017, and must take into account the Commonwealth reporting obligations the SRO must capture in all types property transactions.

    8.3  The LIV in conjunction with the SRO, is revising and updating the duties form to ensure that it is user-friendly while also capturing the necessary regulatory information required by the SRO.

    8.4  For complex transactions, the SRO expect to implement an online functionality so that the electronic submission of complex assessments can be dealt with efficiently. The SRO is working closely with Land Use Victoria and PEXA to build that functionality so that it is implemented with the least possible hindrance to the users of the online platform.

    8.5  The SRO anticipates the implementation of complex assessments to be mandated from 1 August 2019. Currently duties online users require 3 different unique transaction or document numbers to migrate a duty assessment from Duties Online into PEXA. This is to ensure that the correct duties form is being claimed by using the unique identifiers, and then certified in the relevant PEXA workspace. The LIV understands that this is time consuming for practitioners, and is working with the SRO so that further implementation of Duties Online updates become more efficient for practitioners.

  • 9. When you are completing a settlement and something changes, it is not clear that despite the often tight timeframes, practitioners must go back into an already retrieved statement and go back through the form. Could this be explained better on the forms.

    9.1  There are two situations that can arise where the duties statement may be required to be amended and retrieved - either prior to, or post settlement once the Duty Settlement Statement is ‘claimed’ and duty becomes payable 28 days after settlement. Both situations are dealt with below.

    9.2  Duties Statement amended by Transferee / Transferor conveyancing representative

    Once all of the relevant data in relation to the property transaction has been completed by the Vendor’s representative (Transferor Statement) and the Purchaser’s representative (Transferee Statement), the information and form are locked. The clients

    are then asked by their respective conveyancing representatives to either sign the physical form, or an invite is sent through the SRO Duties Online platform for the Transferee(s) and Transferor(s) to sign the form digitally (online).

    Should one of the parties unilaterally amend their client’s information, either due to a change in circumstances, or because of an error, the SRO will send an e-mail notification to the other party’s conveyancing representative, notifying that party that there has been an amendment to the transferee/transferor form.

    If the Transferee(s) or Transferor(s) have already signed the duties statement, it will automatically be unsigned (the SRO will warn you that the form will be ‘unsigned’ prior to you amending the form).

    The form will then require you to retrieve the form on the SRO Duties Online platform and ‘confirm’ the relevant data now updated in the Transferee/Transferor duty form.

    9.3  Duty Settlement Statement claimed

    Where a settlement statement has been effectively ‘claimed’ and the conveyancing transaction is then required to be submitted manually, the purchaser will essentially pay a double duty on the transaction.

    In this situation, the purchaser has paid the stamp duty through PEXA and Duties Online, and will also pay stamp duty at LUV when lodging the paper transfer.

    The SRO has resolved this by escalating the refund request, and it has been reported that these types of situations have been reducing as users become more accustomed to the online and manual processes.

    There is currently no ability for Duties Online to apply the following duty exemptions in a PEXA settlement:

    1. Foreign spouse exemption

    This exemption cannot be processed by the State Revenue Office prior to settlement. The stamp duty surcharge must be paid at settlement via Duties Online and then claimed as a refund post settlement.

    2. First Home Buyer Grant – where there is no financier involved

    Only an approved agent of the State Revenue Office can obtain the FHOG grant for settlement.

    3. Aggregation

    There is no functionality in Duties Online to aggregate consideration paid for various transactions so that the amount of ad valorem duty payable is assessed at a higher amount.

  • 10. Why is there no provision for land tax to be paid on settlement in the PEXA platform?

    10.1 There is currently a facility in the PEXA ‘Financial Settlement Statement’ section to include a payee with a BSB and Account and/or reference number, to include SRO land tax payment as indicated on Section 105 Certificates.

    10.2 The Section 105 Certificate will include the payment details which allow for the land tax adjustment to be paid to the SRO at settlement.

    10.3 PEXA is working with the ATO to deliver a new functionality via their roadmap to allow for payment of the Foreign Capital Gains Withholding tax (FCGW). FCGW will be paid at settlement and remitted to the ATO. This functionality will be analogous to the way stamp duty is assessed and paid.

  • 11. When a transaction is exempt from stamp duty, is it possible to settle in PEXA?

    11.1  Yes, depending on the nature of the exemption.

    11.2  Matters which are commonly non-dutiable (such as between husband and wife) can be completed in PEXA (if assessed in Duties Online).

    11.3  There is a Memorandum of Understanding in place between the SRO and the LUV with regards to duty exempt transfers. Those types of transactions are exempt from the ELN and are therefore not required to be completed on the PEXA platform.
    The SRO are implementing a fix and are looking at incorporating this functionality with PEXA on or around 1 August 2019.

  • 12. Some LIV members have noted that they have spent up to one hour on the phone waiting to be served by PEXA’s support centre and that, in some instances involving ‘edge cases’/’one off’ matters, they have received ‘bureaucratic’ responses. What steps is PEXA implementing to reduce the amount of time that practitioners are placed on hold when waiting to be served by the PEXA support centre? Are PEXA developing programs to assist practitioners?

    12.1  PEXA has tripled the size of their inbound call and e-mail department to handle the increase in demand. PEXA recorded an average wait time in October to be approximately 90 seconds and are committed to reducing that to 60 seconds by December.

    12.2  PEXA welcomes the opportunity to receive feedback from the profession whether it be positive or negative.

    12.3  Significant online resources are available to educate practitioners, as well as inhouse training directly to a firm’s members. The online resources include the PEXA community page, help cards (https://community.pexa.com.au/t5/Help-Centre/PEXA-Help-Cards/ba-p/9183), webinars, blogs, and simulators of the PEXA platform.

    12.4  PEXA can also provide training directly to a firm if requested. This involves a PEXA representative attending the law firm’s office to deliver specific training on how to use the PEXA platform.

  • 13. What should practitioners do to ensure that emails are secure, and also to verify that the correct account numbers are being used?

    13.1  We strongly recommend that practitioners always verify any account details received by a secondary means that are different to the original source from when you first received the details, such as a phone call before signing and authorising the Financial Settlement Statement.

    For example, if someone has sent you details via email we would suggest that you call your client to confirm that those details are correct and that they sent the email before the PEXA settlement platform is marked ‘ready’.

  • 14. There has been a suggestion over the years that it should be a closed system, so that you can’t just nominate an account, and any account you want to send money to through PEXA has to be an account registered with PEXA. That does create practical problems, but would something like that ever exist?

    14.1  That functionality does not currently exist. However recently used account details can be saved in your PEXA profile.

    14.2   If you are dealing with a particular account on a regular basis you can save those details and use them continuously once they are verified with the client.

    14.3  For Subscribers who are particularly concerned about destination payments, it is possible to create a restriction in your profile so that all vendor payments (e.g. payments other than fees, rates and stamp duty) can only be directed to your registered trust account. This prevents your staff from creating ‘free text’ payment instructions. A Subscriber Manager can manage this restriction in your Subscriber Profile.

  • 15. ELN LODGEMENT EXCEPTIONS - Please see below an excerpt from the Land Use Victoria Customer Information Bulletin 180 August 2018.

    15.1  The following are the current exceptions to the Registrar’s Requirement to lodge Instruments using an ELN:

    • the SPEAR ELN
    • there is an existing paper Instrument that has been signed prior to the date when electronic lodgement of that particular class of Instrument or transaction is required
    • if in a combination of Instruments a Party in one or more Instruments is not an ELN Subscriber or represented by a conveyancer or lawyer. 

    Example: where a combination of discharge of mortgage, transfer and mortgage includes a transferor that is not an ELN Subscriber or is not represented by a conveyancer or lawyer, all Instruments may be lodged as a combination in paper.

    • a folio of the Register cannot be dealt with in an ELN
    • an instrument affecting more than 20 folios
    • a transfer is of a type that is not available electronically, such as:
      • transfers creating an easement
      • transfers of an interest (e.g. a lease)
      • transfers of part of land in a folio of the Register
      • transfers of a tenant in common’s share
      • transfers that cannot be assessed for duty using the State Revenue Office Duties Online System – details of the transaction types able to be processed in Duties Online are in the tables of transactions and combinations of transactions available on the SRO website
    • a survivorship or transmission application that is not available electronically, such as a survivorship application by an interest holder.

    15.2  From 1 October 2018, the Registrar will refuse to accept for lodgement any paper instrument that, under the Registrar’s Requirements, is required to be lodged using an ELN.

    15.3  The Registrar will continue to notify industry when new functionality becomes available in an ELN. More ELN functionality will result in fewer exceptions to lodging using an ELN.