In brief - Introduction of electronic leasing to increase efficiency in leasing
NSW Land Registry Services (LRS) recently announced that leases in NSW can now be lodged electronically through an Electronic Lodgement Network Operator. Currently this would be through Property Exchange Australia Limited (PEXA), the only national electronic lodgement network in Australia. For most leases (with some limited exceptions, detailed further below) there is now the ability for representatives of landlords and tenants to prepare, sign and register leases electronically in NSW. This applies to a lease over the whole, or part of the land in a title.
This development is part of the on-going transformation of all property transactions in NSW. The digital transformation process started with mortgages, caveats and conveyancing and is continually expanding. The LRS timeline is that at 1 July 2019 all:
- mainstream property transactions will lodged electronically; and
- paper certificates of title will be fully replaced by electronic certificates of title (known as an 'eCT').
How e-leasing with PEXA works
A lease can now be registered through PEXA in any of the following circumstances:
(a) standalone lease;
(b) series with other leases (consecutive leases); and
(c) in combination with transfers (land transfers and mortgage discharges).
Once a workspace is created in PEXA for the lease, depending on whether the landlord or tenant has created the workspace, the other party is invited to the workspace. Key features of the workspace that increase efficiency include that the PEXA e-leasing workspace:
- directs the landlord to answer a series of questions that replaces standard LRS lease cover page form 07L, by electronically generating a 'cover page' with the information that would have been on the form (such as the property details, the parties, the term, whether there is an option to renew, etc.);
- allows for the mortgagee on title to be invited to the workspace and consent to be given electronically, significantly reducing the time taken to finalise mortgagee consent and subsequent registration of a lease; and
- allows representatives of the landlord and tenant to electronically sign the lease.
However, it should be noted that the current system does not allow for 'Conditions and Provisions' (being the detailed lease clauses) to themselves be drafted on the workspace, though the completed document can simply be uploaded to the workspace.
Additionally, surrenders and variations of leases are not yet available through PEXA, though PEXA has indicated that they may become available later this year.
We will continue to monitor LRS and PEXA releases and provide further updates in due course. These developments are very significant and reflect the commitment of both the NSW Office of the Registrar General and LRS to push ahead with electronic property transactions and digital innovation.
|Duane Keighran||John Douglas|
|Leasing - commercial and retail|
|Colin Biggers & Paisley|
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.