Late last year, the Law Society issued a new Contract for the Sale and Purchase of Land – 2014 edition to eventually replace the current Contract for the Sale of Land – 2005 edition. Unlike previous editions, there is no need to make an immediate switch to the 2014 edition (for example, because of legislative change). However, practitioners have been encouraged to consider the benefits of using the updated 2014 edition.

The main reason for the change is to reflect the evolution of conveyancing to an online electronic-based service. The 2005 edition will continue to be produced in hardcopy (the blue printed forms) until at least December 2015, and the 2014 edition will be available in an electronic format only via the Law Society’s new online portal. The new website has been developed specifically for the purpose of selling Electronic Contracts for Sale (ECOS).

The electronic format has many benefits. For example, it can be:

– emailed to the agent and interested parties;

– purchased more easily than the blue printed forms; and

– updated more quickly when there are legislative or practice developments.

It is expected that many practitioners will switch to the 2014 edition when they start using electronic conveyancing as it contains an additional clause to help practitioners complete the new electronic conveyancing processes. There will be a lengthy transition period so that practitioners can make the switch at a time that best suits their practice needs. Because of this, both the 2005 edition and the 2014 edition will be in circulation throughout this year, so if you are buying and selling property a number of times this year don’t be alarmed if in one transaction the contract you sign is the 2005 edition and in another transaction is the 2014 edition.

What is eConveyancing?

The term “eConveyancing” or “electronic conveyancing” refers to a conveyancing transaction where practitioners have elected to settle electronically through the electronic platform provided by Property Exchange Australia Limited (PEXA). The representatives of the parties and their financiers participate in an electronic workspace, where:

– registry instruments are prepared and electronically signed (transfer, mortgage, discharge/release of mortgage);

– duty may be paid as a settlement disbursement;

– the balance of the purchase money and its disbursement are agreed;

– the documents to be lodged for registration are checked pre-settlement at Land and Property Information (LPI);

– at the agreed settlement date and time, provided the documents are in order for registration, the balance of purchase money is paid and proceeds of settlement are disbursed; and

– the relevant registry instruments are electronically lodged for registration (which usually follows that same day).

Electronic conveyancing does not cover the whole of the conveyancing transaction; just the preparation for and execution of settlement and registration. In relation to the settlement itself, the platform is essentially a virtual settlement room where all the parties collaborate online to finalise the transaction.

There are a number of benefits to eConveyancing, including:

– Greater assurance and protection for parties that dealings will be registered almost immediately after settlement, avoiding the risk inherent in delays

– Reduction of risk associated with using cheques for settlement

– Reduction in time and cost spent chasing mortgagees (both discharging and incoming) and other parties, with the increased transparency of parties’ readiness to settle through the PEXA workspace

– Elimination of the time and cost involved in instructing staff or agents and their attendance at physical settlements and lodgement at land registries

– Multiple updates as to any activity on the title post exchange

– Less reliance on payout figures provided on the morning of settlement with the workspace facilitating an agreed range for the payout figure

– Access to pre-settlement lodgement checks, reducing post-settlement requisitions from LPI

– Immediate distribution of the proceeds of sale post-settlement.

While the transition from the traditional conveyancing process to the electronic based format will be slow and approached with caution by all parties, it is a necessary transition for the conveyancing industry so to progress with the rapid moving IT developments involved in all professional industries. If you have any questions regarding this process and how it might affect you as a purchaser or vendor, please contact our office to talk to one of our property law and conveyancing experts.