What is PEXA and what are the benefits of using it?
If you’ve ever bought or sold property, then you know how achingly slow the traditional conveyancing process is. Lawyers and banks need at least two weeks to get all the paperwork in order and even then it’s a nail-biting wait to see if everything goes through without any hiccups.
Enter PEXA, a digital conveyancing platform that’s making life easier for lawyers, conveyancers and financial institutions all over Australia. We take a closer look at what PEXA is, how it works and some of the pros and cons of using it.
What is PEXA and how does it work?
PEXA was formed by the Council of Australian Governments (COAG) and was first used in 2014 in NSW. It’s an online conveyancing platform that provides a workspace for the lodgement and transfer of documents, as well as the quick financial settlement of property sales.
PEXA is now in five states and has been speeding up the conveyancing process markedly. By October of 2017 there were 4,866 PEXA members and 571,315 property transactions had been completed.
Here’s a brief outline of how PEXA works:
- A secure online meeting room, called a ‘workspace’, allows each participant in a PEXA transaction to interact.
- Conveyancing documents including a Transfer, Mortgage and Discharge of Mortgage, are created within the workspace, signed and lodged online.
- It enables a seamless updating of land title records with the relevant Land Registry.
- It enables the conveyancer to liaise with the home buyer or seller’s bank
- It enables the transfer of funds to ensure a fast and smooth settlement.
What are the main benefits of using PEXA?
Less paperwork – since everything is done online there’s no need to print, scan, collate or post/courier documents involved in the transfer of property.
Less errors – errors are reduced by automatic online document checks. Documents registering ownership of property are also lodged instantly to cut down on wait time.
Faster – the conveyancing process is streamlined. Rather than waiting days for cheques to clear, PEXA’s automatic online document checks provide greater certainty that settlement will be completed on time.
Tracking – PEXA allows more transparency for buyers and sellers through theSettleMe app. This allows buyers and sellers to track the process of their settlement and receive instant alerts via SMS or email.
Who pays for PEXA?
Another benefit of moving to PEXA is the reduction in the administration costs involved when buying or selling a home. But there is still a PEXA fee of approximately $110 for each buyer or seller for settlement to be completed electronically.
PEXA members, i.e. lawyers, conveyancers and financial institutions, don’t pay ongoing subscription fees, and are only charged for each transaction. The PEXA fee is generally included as part of the settlement costs.
According to the PEXA website the fee includes things like:
- Document creation
- Lodgement support services:pre-population of registry data, lodgement verification and automatic title activity checks
- Digital signature security
- Document lodgement with the land registry
- Stamp duty verification
- Electronic settlement booking
- Financial settlement
- Electronic third party disbursements.
Is PEXA Safe?
One of the main concerns with PEXA is surrounding its safety and security. How safe is it to transfer large sums of money using the system?
Although signings and transactions are encrypted it still didn’t stop online hackers stealing settlement funds worth $1.25million. Even though the bulk of the money was recovered it prompted a backlash from professionals who were concerned the system was not ‘sufficiently robust’.
PEXA representatives insist that this was an isolated incident and no further instances of hacking have occurred. Time will tell.