Whilst it was just last year that the property industry was forced to get its collective head around the conveyancing portion of the Property Exchange Australia (PEXA) system, it has since 10 December 2018 been possible to register leases via PEXA - an update that has required many to take an even closer look at the growing benefits of the electronic conveyancing platform.
On hearing the news, my initial
reaction was one of wariness - although having reviewed the actual
requirements for registering a lease, it seems that this recent
change does have the genuine potential to reduce the time that it
takes to register leases here in Australia. It is also clear
that the procedure for registering leases via PEXA is easy to use
and will, hopefully, facilitate a faster move towards
electronic signing of leases.
What is the new
Users are now able to register a lease on PEXA if it falls within the following categories:
- It is a standalone document;
- It is in combination with other documents (i.e. Transfers or Mortgage Discharges); and
- It is in a series with other leases (i.e. consecutive leases).
Once a Workspace has been created
in PEXA, the user will be either automatically invited, or tasked
with extending an invite to the other party (dependant on whether
they represent the
PEXA's ability to register
leases negates the need for the
LRS 07L form that many have become accustomed to, as the new
system automatically generates a cover page based on a series of
questions asked of the
landlord. Whilst this PEXA cover page does look
different, it encompasses all of the relevant details, including
lessor, lessee and lease specifics.
At present, there is no resource
available to draft the Conditions and Provisions on PEXA (although
this may be something to look out for in future releases). With
this said, the process simply requires users to upload their
document to the Workspace. From there, it is possible to
attach Plans, Ministers Consent and Caveator's Consent
documents, Tenancy Guides and Disclosure Statements (for
Practitioners sign off on behalf
of their client (once they are given authority via a PEXA
authorisation form) and the responsible party lodges the lease to
the Land Registry.
The PEXA system allows
practitioners the ability to invite the
Mortgagee on Title into the Workspace, and for mortgagee
consent to be given electronically. It is currently
uncertain, and time will tell, whether banks will insist on
obtaining hard copies of such documents - however, if not required,
it would provide the opportunity to speed up the finalisation of
the leasing process. In my experience, finalising the
registration of a
lease can often be delayed by the mortgagee consent process.
Is there a downside to this new system?
Practitioners will be required to obtain a PEXA Client
Authorisation and will need to complete a verification of identity.
Whilst this may add an extra step to the leasing procedure, I
expect that most practitioners will be happy to accept more robust
methods through which to identify clients. This change will also
provide uniformity across firms with regard to client verification
- especially due to the fact that in some practices, verification
of identity is mandatory.
Whilst the system is currently
only designed for
leases, PEXA has suggested that
Surrender and Variation of Leases will be released in the first
half of 2019 - meaning that we are still waiting for subleases and
assignments to be made available via the online platform.
There is no mention of when the
registering of leases via PEXA will become mandatory, however
practitioners should familiarise themselves with the electronic
process sooner rather than later in order to ensure that they are
effectively utilising all available services.
What you cannot escape
One point that must be noted is
that users will still be requisitioned if there is an issue with a
submission, and that the lease may be made subject to manual review
at the Land Registry if it does not meet all requirements - so you
cannot expect to make shortcuts with page numberings or plans.
It appears that these requisitions will be issued via the
notifications and chat section of the PEXA portal. However,
if you are requisitioned, you will receive a dealing number for the
documents, visible in your PEXA workspace. This is useful, as
the number will allow you the ability to directly follow the
progress of the relevant matter with the Land Registry.
The lodgement fee associated with
registering a lease will no longer be applicable on the PEXA
platform; and has been replaced with a PEXA fee. The
price difference between a lodgement and PEXA fee is not
significant, with the latter costing $42.24 for a single title
Although some practitioners may wish to bury their heads in the sand and look to avoid change, I feel that this reform is another step in suitably pushing the leasing industry into a more efficient place one which undeniably provides a myriad of benefits not only to practitioners but also to their clients.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.