‘Interoperability’ in Conveyancing – what is it?

A bit of background…

Over the past few years various state governments have finally changed laws to allow for electronic conveyancing, meaning transfers of ownership and other dealings with land such as mortgages and leases can be performed by electronic means and without paper documents.  As part of this process paper certificates of title for properties became obsolete as they could play no part in an electronic system.  The effect of this is that a lawyer or conveyancer no longer has to lodge a paper transfer or other paper “instrument” at the state’s land registry to have it registered on the land title, it is now possible for them to do this online.

To do this, we must use an electronic lodgment platform, or portal.  Where money is to change hands as part of the transaction (as is almost always the case with a sale and purchase), the platform needs to allow not only the lodgment of the relevant instruments, but also the transfer of funds at the same time.  The state governments have not created those platforms, but have instead looked to the private sector to provide this service for a fee which would be charged to the parties to the transaction.

The arrival of PEXA

The first private sector provider was Property Exchange Australia, or “PEXA”.  PEXA’s platform enabled sale and purchase transactions and various other property-related dealings to happen online.  The range of dealings which can be done electronically via PEXA has increased progressively, though there are still a few types of dealing which they have not yet been able to make available.

Creating a platform which provides adequate security for dealings with land and the transfer of large sums of money and is also not excessively complex for the user was no doubt a huge challenge.

To be able to transact on any electronic platform, a lawyer or conveyancer must become registered as a user of the platform, and staff must be trained in the use of the platform, and all of the security protocols which are essential to protect clients.  There is a lot to learn, even for practitioners and staff who have been involved in conveyancing work for many years.  It was fair to say that initially, there was some reluctance to spend the time getting up to speed with the electronic systems.

When COVID-19 struck, the uptake of electronic conveyancing leapt ahead.  Paper property settlements typically involved many people in the industry meeting in confined spaces to exchange documents and bank cheques for several different transactions in a short space of time.  It was sometimes not much different to old fashioned stock exchange floors!  The scope for transmission of infection was far too high using the traditional system, and the industry rapidly moved to a point where the great majority of transactions were carried out electronically.  PEXA’s turnover increased very quickly and substantially.

New electronic settlement platforms

It was always intended that there would be more than one electronic settlement platform, so that there would be competition to keep charges down.  Unfortunately no other provider moved anywhere near as quickly as PEXA, and so we are only now reaching the point where there are other providers offering a workable alternative platform.  In South Australia, and elsewhere as well, the most advanced new entrant in this space is “Sympli”.

This is where interoperability comes in!

If one lawyer wants to use PEXA, and another lawyer involved in the same transaction wants to use Sympli, the only way that can happen is if the two platforms “talk” to each other – in other words, there must be interoperability between them.  This adds another layer of complexity to an already complex system. There are broadly two ways this could be achieved:

• have a separate “hub” which each platform can connect to, and which will interpret between the two (or more) platforms, or;
• require each platform to program their software so that it can talk to other platforms.

Each option would require a great deal of time, effort and expense, to both establish and maintain.  There are also many procedures and principles to be determined to govern the operation of the system.  Despite strong pressure from various sides, particularly the NSW government, the process is moving slowly, and we now (in November 2022) still seem to be many months away from interoperability, and effective competition between electronic settlement platforms, being a reality.

Get in touch!

Our team at Tindall Gask Bentley Lawyers is experienced in all aspects of conveyancing and understands the importance of providing an efficient, professional conveyancing service to you.

Find out more about the conveyancing services provided by TGB, get in touch with us here or call us on (08) 8212 1077 to talk to one of our team.