Big changes in selling properties

Big changes in how a house is sold came into force on August 1. All vendors must now provide a detailed Disclosure Statement to prospective purchasers prior to entering into any sale contract.

Failure to do so, or do it correctly, entitles the purchaser to pull out.

The Disclosure Statement is lengthy and onerous and takes time to complete.

This has resulted in slowing down the sale process.

This comes on top of the recent changes dictating that selling occurs via an electronic platform rather than the old ‘paper’ style.

Those of us who have bought and sold properties over the years would be familiar with the traditional way a settlement happens: all the parties, usually through solicitors and the banks, meet in a room and hand around signed transfer and stamp duty documents, new mortgages, old mortgage releases and bank cheques to make the settlement happen. Once that occurs the physical documents are sent off to the Titles Office for lodgment and registration, and the parties rush off to their bank to deposit their cheques before it closes for the day.

Not anymore.

Transfers of real estate are now handled via the electronic platform known as Pexa.

Until recently, electronic settlements were optional, but now are compulsory.

The easiest way to imagine it is that instead of a physical meeting in an actual meeting room, all the parties meet electronically in a virtual meeting environment. All the parties join in to the Pexa workspace in advance of the agreed settlement date and time and input the requisite details – who is transferring to whom and who is being paid what.

The transfer, release of mortgage and new mortgage are electronically shared with the Titles Office for registration.

Payments are made into the nominated account as cleared funds.

No more waiting three business days for a bank cheque to clear.

But what about cybercrime? Will the money end up in Nigeria?

Our experience is that Pexa is incredibly security conscious. Getting registered to operate in Pexa is quite a laborious process of identity proof and independent confirmation.

Tens (perhaps hundreds) of millions of dollars go through the system daily.

It is essential that the Pexa electronic environment is as secure as is possible, and it is being constantly updated in relation to cyber threats.

An example is that to direct funds to an account that hasn’t been used before in Pexa (as in the case with many of our clients selling their home after many years), the destination account must be input three times, and all match, to be allowed to proceed.

Having operated for more than 30 years in the paper-settlement world, we can say that the electronic-settlement process is quicker, simpler and definitely better for clients and lawyers.

Like all changes, the vendor disclosure obligations that commenced on August 1 are initially intimidating, but over time (like electronic conveyancing), it will become the norm.

 Sunshine Coast & Brisbane Elder Law specialises in retirement village purchases, and the selling of homes to fund that purchase. Contact the team on 1800 961 622 or visit sunshinecoastelderlaw.com.au or brisbaneelderlaw.com.au