Call for clarification before action
eConveyancing deals with the end-phase of a property transaction. It does not cover the negotiation, vendor disclosure and contract phase, which is still heavily paper-based.
The Electronic Transactions Act 2000 allows signing and writing requirements to be satisfied electronically, but there is reluctance to adopt digital signing technology in the conveyancing industry. This is because of:
- Uncertainty about the way land contracts can be formed
- How vendor disclosure should be made
- Common law requirements for deeds to be executed on paper, parchment or vellum
- The requirement for deeds to be witnessed
In a discussion paper released in December 2017 respondents supported clarification of electronic signing requirements for contracts, instruments and deeds in relation to land. However, it was suggested reforms should not prescribe the form of signature, and technologically-neutral language should be used to maintain flexibility.
There was also divided opinion about the need for deeds to be witnessed, with some submissions seeking to retain witnessing requirements to prevent fraud.
REINSW has lobbied in favour of digitising real estate processes for the benefit of the industry, its professionals and consumers. Despite concerns raise by some interested parties, REINSW is in support of removing witnessing requirements, especially in relation to residential tenancy agreements.
What will change?
The proposals determined from the respondents seek to remove perceived barriers to fully digital land transactions. This will be achieved by:
- Clarifying that parties can enter into land contracts electronically (although this is not mandatory)
- Amending the Conveyancing Act to allow notices to be served electronically
- Updating all requirements relating to font sizes and other paper-specific matters to make them applicable to electronic contracts
- Clarifying that all deeds can be signed and witnessed electronically
- Amending the Real Property Act to remove barriers preventing land transaction documents being prepared in electronic format
When passed, these changes will significantly streamline property transactions. If successful, the NSW digital property reforms could set an example for other states.