To the uninitiated, a property settlement can appear to be a frantic scene – a mass of paperwork is passed from person to person and checked and double-checked for error. The introduction of a new electronic transaction system, known as PEXA – Property Exchange Australia – is set to change all that.
PEXA removes the requirement for a paper transaction and physical attendance at settlement, and should ultimately streamline the process to allow lawyers, conveyancers and banks to transact online.
The scheme is fully operational in New South Wales, and Victoria is set to follow. The four major banks have signed up to PEXA, as have some credit unions.
The primary transactions that can be settled on PEXA are new mortgages, discharge of mortgages and re-finances. Representatives of the vendor, purchaser and bank can coordinate a settlement time and date and digitally sign documents. The relevant files are uploaded and can be viewed by all parties registered for the transaction. In addition, authorised cheque directions can be uploaded and viewed by all parties prior to settlement, avoiding the last minute rush to ensure bank cheques are delivered on time.
PEXA also allows for:
- payment of stamp duty to the State Revenue Office
- e-lodgement of documents with the Land Titles Office
- secure online payment of settlement funds by the participating banks following settlement.
PEXA is expected to substantially reduce the processing time and paper footprint of a transaction, in much the same way as the introduction of electronic court filing in 2009.
Nicholas O’Donohue & Co registered with PEXA in June 2014 in preparation for our property team to handle electronic online settlements during the first half of 2015. More soon!