The days of a physical title for a property are finished. Since late last year, sellers and buyers or their representatives meet on line and transact by electronically signing document. No physical meeting happens anymore. The Banks will now electronically sign the Mortgage documents on behalf of Borrowers. So what about ID fraud? Garth Brown, from Brown & Brown Conveyancers, joins us to explain how it works.
Kevin: When it comes to buying and selling properties, we get used to the delays around settlement time or get very nervous as we head up toward settlement because of the possible delays with making the transaction happen. This sometimes can revolve around titles, but the days of physical titles may well and truly be finished. Joining me to explain a little bit more about this is Garth Brown from Brown & Brown Conveyancers.
Garth, thanks once again for your time.
Garth: Thanks Kevin.
Kevin: Titles – these are going to be done digitally from now one, are they?
Garth: Yes. What has happened recently, since October last year, the actual physical titles will be done away with as the new electronic settlements come on board, which has started in New South Wales and is presently being rolled out to Victoria and to the rest of the country by the end of this year.
The physical titles were mainly brought about to prevent fraud, but interestingly, it has actually created more fraud. This is one of the reasons why an actual physical title will be done away with and you’ll actually be registered on a computer register. There won’t be any physical title any more.
Kevin: When we talk about physical title, you’re talking about a title deed – a document – that’s being done away with.
Garth: It’s that cardboard physical title, yes.
Kevin: Some people still like to have those to say, “This is the title; I now own this,” but we’re in the digital age, having to get used to letting go of such documents, aren’t we?
Garth: Yes, definitely. Settlements are moving very fast toward going to an Internet space, where monies will be transferred and interacting with banks and other conveyancing firms. Everything will be done that way rather than turning up with physical documents. This is where delays can happen, because a document is missing from another party so the settlement can’t go ahead.
All of these procedures, even two weeks out from settlement, are all run through to make sure that the correct title references are located, the banks are all invited to come to that space two weeks in advance, and the funds that are required and where they have to be transferred to. this is all now available through PEXA. It’s a wonderful tool, because the delays in settlement will be very minimal now.
Kevin: You mentioned PEXA. That is actually what the platform is called. One thing that worries me, Garth, we talk about a lack of fraud, but we’re hearing about so much online fraud now. How are we going to make sure this is not going to get even worse?
Garth: That’s a good point. One of the pivotal points that PEXA was able to overcome is that all vendors and purchasers will now be identified through a 100-point checklist. Basically, they’re going to the Australia Post, having their photo taken and all the other supporting documentation to verify as to who they are. There is also another provider where they’ll actually go to the house and do the identity checks, as well. That is another way that can be done.
Fraud prevention is a big thing in this new system, PEXA. This is one way that PEXA is overcoming this, because if that identification is not in place and verified by the government and then stored electronically through the PEXA system, then the transaction will not go ahead.
Kevin: As you mentioned about going to the post office, having photos taken and 100 points of identification, are there any other things that we, as consumers, will notice as we move further into PEXA?
Garth: Yes. You’ll notice that when it comes to signing mortgage documents, the bank will now be signing those mortgage documents. There won’t be this delay where documents are sent out to the client, they’re finally signed and then they’re sent back into the bank ,and the bank is trying to find them.
That is all being done away with. The bank will be signing the mortgage documents on your behalf, and they’ll be electronically liaising with your conveyancer and with the other parties of settlement. These delays will be gone.
Kevin: Is it likely we’ll see shorter settlements on some properties?
Garth: That’s a good question you raise. It could become shorter, definitely with these hurdles starting to be removed that can stop a settlement. That could likely be a possibility for the future.
Kevin: I guess only time will tell. Garth, I want to thank you for bringing this to our attention and once again, being our expert on the ground with this one. I appreciate your time. Garth Brown from Brown & Brown Conveyancers.
Thank you for your time, Garth.
Garth: Thanks Kevin.