Earlier this year the NSW Government announced that online property settlements will be compulsory in NSW by 1 July 2019.
What does this mean for property developers?
By the end of this year all property settlements must be managed online in Western Australia. By no later than June 2019 they must all be managed online in NSW and Victoria, and Queensland is likely shortly to follow NSW and Victoria.
How are settlements managed online?
Online settlements are managed by PEXA (Property Exchange Australia), which has been operating this settlement process since 2015. PEXA was formed to deliver a single, national property contract settlement solution to the Australian Property Industry. Key shareholders include state governments and Australia’s five largest banks.
Contracts entered into on a digital platform can soon be integrated with PEXA to facilitate PEXA online settlements. Legal practice Colin Biggers & Paisley have developed such a digital platform, known as CBP Exchange.
What is CBP Exchange?
CBP Exchange, is Colin Biggers & Paisley’s online property contract platform, which has revolutionised the way real estate is bought and sold. Since it commenced operation in 2015, more than 2000 property contracts have been entered online through the platform.
As long as a purchaser has access to an internet connected device, a CBP Exchange e-contract can be signed at anytime and anywhere in the world.
CBP Exchange eliminates the need to print, sign and return contracts manually. This results in better quality control, tighter security, faster turnaround time and far less cost.
How is CBP Exchange working with PEXA?
and PEXA IT developers are currently working together to integrate the systems with the objective of eliminating paper and automating the conveyancing process from creation through to settlement. This integration will mean that contracts can be entered into and settled at any time regardless of the physical location of signatories and other participants when their action or authorisation is required.
Are electronic signatures legal?
Yes. In a number of recent cases courts have accepted that even a name printed at the foot of an email is adequate to constitute a signature which binds the sender to the contract evidenced in that email.
Are contracts signed through CBP Exchange secure?
CBP Exchange is more secure than paper contracts. It uses DocuSign technology which enables contracts to be signed electronically, whilst ensuring that the contract is secure and cannot be changed without detection.
How can you ensure that documents are signed by parties in the correct order?
Once all parties have signed a set of contract documents, you can download a digital certificate from DocuSign which shows the time, location and order of signature on each document signed.
Do banks accept electronically signed contracts?
Yes. On every occasion that a developer has adopted CBP Exchange for its project, the project financier has accepted e-contracts as good security for construction loans. And a wide range of banks have approved finance for purchasers exchanging contracts through CBP Exchange. We have not had one instance of bank rejection of CBP Exchange e-contracts.
Trends in technology
People are getting used to having everything accessible on their phone and CBP Exchange follows this trend in technology. If you have a smart phone it is most likely that you have access to your email, which means that busy developers and their subdivision or apartment lot purchasers can sign contracts anywhere and anytime. In one example earlier this year, a purchaser signed a contract in Brisbane, her co-purchaser signed in Beijing, and when the developer signatory then signed the contract a fully signed copy of the document (confirming that the contract was now binding) was emailed to all parties just minutes after the first purchaser signed.
, Property Partner at Colin Biggers & Paisley says CBP Exchange responds to clients demands for a faster and more cost efficient contract process, with real time reports available to developers at all stages of the process, and looks forward to the achievement of PEXA integration by the end of this year.
This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2020.