The National Electronic Conveyance Office (NECO) has announced the development of a National Electronic Conveyancing System (NECS) entered a "new phase" following the 6-US meeting on 30 March 2007 of its decision making body the National Steering Committee.
In a statement dated 18 March 2007, National Steering Committee chairman Les Taylor reinforced the need for the committee to have a “common view” on the way forward on electronic conveyancing (e-conveyancing) through a “national business model”.
What is electronic conveyancing?
E-conveyancing seeks to provide a “shared electronic workspace” for legal practitioners, conveyances, financial representatives and mortgage processors to:
- Prepare dealings and related instruments to register changes in ownership and interests;
- Settle financial transactions (including payment of duties, taxes and any disbursements);
- Lodge their dealings with the appropriate Land Registry; and
- Receive confirmation of dealing lodgement and registration.
Each party provides information relevant to the property transaction electronically rather than the traditional paper-based approach.
The NECS model seeks to ensure parties undergo strict security checks and meet certain threshold requirements in order to be party to the proceedings. This includes the verification of identity via an “Australia Business Number Digital Signing Certificate” (ABN-DSC).
Digital conveyancing seeks to do away with the traditional physical swapping of legal deeds, manual signatures and drawing of bank cheques. Settlement, lodgement and notification of transaction details all occur electronically in one continuous process.
What are the benefits of electronic conveyancing?
According to both NECO and the Department of Land in Victoria, the benefits of e-conveyancing include:
- Saving time and space by eliminating the need to store bulky paper certificate of titles and mortgage documents;
- Saving on bank clearance time by eliminating manual drawing or depositing of bank cheques via a new Electronic Funds Transfer option;
- Easy access to all subscribers regardless of time or place;
- Improving efficiency and reducing costs for solicitors, conveyancers and financial institutions by cutting down on the need to organise and attend face-to-face settlement.
What are the disadvantages of electronic conveyancing?
There has been widespread debate over a number of potential concerns, including:
- Whether electronic conveyancing will make land titles registration more vulnerable to fraud;
- Consistency of the NECS model between states and territories; and
- Technology teething problems and outages.
The proposed system also does not cover:
- Preparation and exchange of contracts for sale;
- Pre-settlement investigations;
- Procurement of any insurances required by purchasers; and
- Creation of loan documents.
- Processes for examining and registering instruments once lodged with a Land Registry.
NECS latest update – the National Business Model
Mr Taylor said in the latest Steering Committee meeting he sought and obtained from all the jurisdictions a commitment to the National Business Model as the basis for developing the national system.
According to NECO, the Committee endorsed
- The National Business Model as the basis for national electronic conveyancing;
- Progressing the work to develop the detail of what is required as quickly as possible; and
- A “National Roadmap” as the basis for defining and implementing NECS, with the updating/republishing of the Roadmap documents with the relevant findings relating to risk, regulation and governance and of the national consultation so far.
"The independent consultancy reports on risk assessment, regulatory review and governance together with the Progress Report on Consultation were well received," Mr Taylor said. "Their findings will provide guidance in further developing the requirements for NECS and its supporting arrangements."
According to NECO, the Committee has given it the green light to proceed with the next stage of the project. NECO has now commenced preparation of a comprehensive and detailed plan for implementation of the NECS.