On 4 July 2016 Dominic Perrottet, Minister for Finance, Services & Property announced that NSW plans to phase out paper based conveyancing entirely by July 2019. This comes hard on the heels of increased adoption of paperless lending and the impending nationally uniform mortgage.
The NSW proposal means no paper lodgements at all. Most regular dealings will be only capable of lodgement through PEXA. This timetable has since been informally adopted by Victoria and it is likely that other jurisdictions will follow.
Gadens Partner Jon Denovan is part of the working group meeting fortnightly to progress this initiative.
This is much more than so called ‘alignment’ adopted in South Australia from 4 July 2016 and being progressively introduced in Victoria. Under ‘alignment’ electronic processes apply to paper lodgements as well as electronic lodgements. For example, certifications must be lodged by mortgagees and lawyers instead of dealings – rather like the way the PPSR operates.
It’s surprising to read in various publications rather breathless announcements about paperless lending and a new national mortgage form. These reforms have been in the making for many years. Gadens has been working with state and territory land titles registrars-general, ARNECC and many lenders to:
- eliminate paper from lending products; and
- assist in the development of e-conveyancing and the national mortgage form.
Now that paper certificates of title are being phased out, a key project is to stop having paper document storage arrangements at all. Paper document storage is expensive, inefficient, and is not as secure as electronic storage. There’s no reason why everything can’t be stored electronically. Many businesses are considering rationalising or eliminating their existing paper storage arrangements.
There is no reason why most steps in lending cannot occur electronically. The last few barriers only apply to loans secured by real estate and even those are likely to disappear within 12 months in most states.
Organisations that do not have a project plan to move to paperless may be at a competitive disadvantage. Gadens’ experience in process change has demonstrated not only significant cost savings, but also significant improvement in customer satisfaction, a reduction in re-works and a better compliance regime because of a better and more orderly document chain and lending process.
The national mortgage form will become virtually compulsory from May 2017 (less than 12 months away). Gadens has been working with the project team for a long period. Lenders should act now to have their mortgage documents and production systems reviewed to ensure they are ready well before the May 2017 commencement date.
Paperless office and better systems? You bet. They’re the future.