We are now prescribed for PEXA, but what is PEXA?
What is PEXA and e-conveyancing?
PEXA stands for Property Exchange Australia. It is an online electronic lodgement network which enables solicitors and conveyancers to conduct e-conveyancing via an online portal.
E-Conveyancing essentially minimises the manual processes and paperwork associated with property settlement by enabling solicitors, conveyancers and financial institutions to transact together online in real time for a seamless transaction.
Most firms in Queensland are still conducting property settlements by way of 'paper settlements'. A paper settlement is basically a physical settlement whereby firms engage settlement agents to meet with financial institutions, at a specified time and location, usually after 2:00 pm to around 4:30 pm AEST daily, to conduct the process of settlement. This is done by way of exchange of documents and cheques.
The downside of paper settlements is that there is a large margin for error, creating delays and subsequent penalties, as a result of typing errors, miscommunication and banking errors.
Imagine a stack of dominoes. These dominoes are set up in a line with each 'domino' having a particular role to play in the transaction. For example, the second domino inadvertently drew an incorrect cheque due to simple human error... the result... settlement would be delayed and/or rescheduled, and therefore the dominoes all begin to fall.
Conveyancers spend a considerable amount of time re-scheduling settlements, by phone and email, due to small errors that could be avoided. But this has changed due to the advent of PEXA, which enables all parties to a transaction to have transparent access to a 'workpace' that allows all parties to review, submit and amend matter details electronically. Thus, eliminating errors that occur during the conveyancing process. It also allows for speedy clearance of money (12-24 hours, however, often within a matter of mere hours) and almost immediate transfer of ownership (approximately 20 minutes).
Many States and Territories have already deemed participation in PEXA as mandatory, and we suspect that Queensland is not far behind.
The Bottom Dollar (Let's Crunch the Numbers)
Lets look at the cost of paper settlements to the client versus the cost of PEXA:
Sale - an estimated cost of: settlement agent $50.00* + banking fees of say $22.00* per cheque = $72.00+, based on the assumption that we are only depositing one cheque.
Purchase - an estimated cost of: settlement agent $50.00* + priority notice** (if required) $55.00* + check title search $36.20* + bank cheque fees of approximately $10.00* per cheque = $151.20+ based on a very conservative estimate.
Sale - one flat fee of $114.07 ($130.68 for multiple title) = $114.07, this does not vary at all no matter how many cheques you have or deposits required, and a settlement agent is not needed. Benefit: all funds are immediately disbursed and will be credited within 12-24 hours to your nominated account, often much quicker.
Purchase - one flat fee of $114.07 ($130.68 for multiple title) + $9.13 for a priority notice (if required, these are often not required) = $123.20 total, this does not change and it is not dependent on bank cheques and includes check title search required before settlement, and a settlement agent is not needed. Benefit: the property will transfer into your name within 20 minutes, this usually can take days even weeks.
*Estimation only depending on Settlement Agent and Search Databases used.
**For a detailed explanation of Priority Notices follow this link: https://www.pexa.com.au/priority-notices
So now you know.... PEXA is the way!
For us to use PEXA for you, we will need you to first complete an Client Authorisation Form. You must then complete a Verification of Identification which can be done at our firm or at an Australia Post outlet.
Once you have provided the necessary authorisation paperwork, we will commence your matter on PEXA and you will receive a text message and email invitation, so that you can monitor the progress of your matter from the comfort of your own home.
Disclaimer: This publication is not intended to be comprehensive, nor does it constitute legal advice. We are unable to ensure the information is current and there is no guarantee in relation to accuracy. You should seek legal or other professional advice before acting or relying on any of the content of this publication.
© Richard Hoare & Co Solicitors