{"id":2342,"date":"2020-03-09T10:59:13","date_gmt":"2020-03-09T10:59:13","guid":{"rendered":"http:\/\/insight.thomsonreuters.com.au\/?p=2342"},"modified":"2022-08-03T16:03:51","modified_gmt":"2022-08-03T05:03:51","slug":"managing-risk-in-electronic-land-transactions","status":"publish","type":"post","link":"https:\/\/insight.thomsonreuters.com.au\/legal\/posts\/managing-risk-in-electronic-land-transactions","title":{"rendered":"Managing Risk in Electronic Land Transactions"},"content":{"rendered":"\n

With one mandate deadline for electronic lodgment of land dealings remaining, and the decision of\nGuirgis v JEA Developments Pty Ltd<\/em> [2019] NSWSC 164 handed down by Kunc\nJ in February 2019, Thomson Reuters author, lecturer and sole practitioner Greg\nStilianou reflects on his career and managing risk when engaging in online\nproperty transactions. <\/h4>\n\n\n\n

Read on for his legal commentary, starting off with an overview of Greg’s participation in the legal profession to date\u2026<\/p>\n\n\n\n

Background<\/h2>\n\n\n\n

Since leaving the land titles office in January 2019, I have been teaching at The College of Law in their property practice Masters and Practical Legal Training programs. In my role I need to be at the forefront with the evolution of property law in practice. I\u2019m grateful for the knowledge and experience that I gained from working at the land titles office, with both the Government agency and the private operator. I feel honoured and fortunate to now be in a position where I can provide the legal profession with my insights, not only through Thomson Reuters\u2019 Baalman & Wells<\/em> Land Titles Office Practice<\/em><\/a> <\/em>(LTOP) and my teaching, but also as a consultant through my legal practice, Greg Stilianou Legal<\/a>. <\/p>\n\n\n\n

When I started writing\nfor the LTOP service in early 2016 my objective was to ensure the commentary\nassisted practitioners to successfully interact with the land titles office.\nNow with the movement of risk to private practitioners engaging in online\nproperty transactions, and having transitioned to private practice myself, I\nbelieve I am in the best position to know what subscribers need from LTOP and\ndeliver it.<\/p>\n\n\n\n

Electronic lodgment networks (ELNs)<\/h2>\n\n\n\n

ELNs\nare the domain of the legal profession and soon we will see the\nRegistrar-General publish a list of land transactions (Required Dealings) that\nmust be lodged electronically. This requirement forms part of the latest\nversion of the Conveyancing Rules and relates to the final electronic lodgment\nmandate commencing 1 July 2020. It is expected that the list of Required\nDealings will capture most, if not all, of the remaining land dealing types,\nthe intent being that all<\/em> land transaction dealings must be lodged\nelectronically. <\/p>\n\n\n\n

RELATED: <\/strong>Electronic Signing by Company Officers and the Paper Requirement for Deeds <\/a><\/p>\n\n\n\n

Electronic land transactions: What are the risks?<\/h2>\n\n\n\n

Assessing compliance with land titling laws <\/h3>\n\n\n\n

The\nReal Property Act 1900<\/em> now provides that certain statements, caveats,\nnotices, applications and other information in support of land dealings can be\nverified in a way approved by the Registrar-General, as an alternative to\nproviding a statutory declaration<\/em>. This amendment is a sign of things to\ncome. It is anticipated that, instead of the Registrar-General satisfying\nitself about the registrability of land dealings based on statements etc that\nwould normally accompany a paper dealing, practitioners<\/em> will be required\nto satisfy themselves. Practitioners<\/em> will give a certifying statement to\nthe Registrar-General in relation to that evidence when electronically lodging\ndealings. <\/p>\n\n\n\n

Example:<\/strong> Instead of lodging an\nApplication for a Possessory Title with statutory declaration evidence for the\nRegistrar-General to examine and consider whether or not the applicant has\nadversely possessed land for the requisite period of time, a legal practitioner\nmay be required to do that assessment and make a verifying or certifying\nstatement in relation to that assessment in favour of the Registrar-General. <\/p>\n\n\n\n

The\nParticipation Rules are presently under review. \nI expect the certification about holding satisfactory evidence in\nsupport of the land transaction to be amended to be more robust and operate as\nthe alternative to providing a statutory declaration<\/em> in favour of the\nRegistrar-General. <\/p>\n\n\n\n

The\nshift to legal practitioners assessing compliance with land titling laws is\ncontinuing and research to minimise these risks is required. LTOP is not just\nabout how to successfully interact and obtain registration with the land titles\noffice, it assists practitioners in successfully assessing the quality of\nevidence that would otherwise be lodged for assessment by the land titles\noffice.<\/p>\n\n\n\n

RELATED:<\/strong> Electronic Deeds: Recent Developments in NSW<\/a> <\/p>\n\n\n\n

Guirgis v JEA Developments Pty Ltd<\/em><\/h3>\n\n\n\n

The days of lodging a land dealing and waiting\nfor the land titles office to send a requisition to inform and educate us about\nwhat\u2019s wrong with the documents are numbered. Along with the statutory\namendments mentioned above, we saw in Guirgis<\/em> that the Court has little\npatience for practitioners who do not apply the same scrutiny to land\ntransactions in the electronic environment that they do in the paper\nenvironment. In both mediums, the objects of the transaction are the same; the\nonly difference is the mechanism. It\u2019s important to note that the mechanics in\nthe electronic environment place a greater role on practitioners. <\/p>\n\n\n\n

\u201cThe requirement to give the requisite representations and certifications operates to confer on (practitioners) the role of a guardian at the gate\u201d<\/p> \u2013 Guirgis <\/em>per Kunc J, at [39]. <\/cite><\/blockquote>\n\n\n\n

To be a property practitioner means we now, in\naddition, have to be compliance officers for the land titles office. Guirgis<\/em>\nis an important reminder to the profession to embrace technologies that make\nour practices efficient with caution. Our role is to scrutinise the content of\nthe screens the ELN presents for clicking and signature \u2013 to assess whether the\ncheckbox, certification or statement can be appropriately given.<\/p>\n\n\n\n

The practitioner will be responsible for the\ntransaction, the ELN will not.<\/p>\n\n\n\n

3 tips to help property law practitioners manage risk<\/h3>\n\n\n\n
  1. Double check everything<\/strong>: The lesson from Guirgis<\/em> is to scrutinise the content on the screens that your ELN presents to you and assess whether you can make the certifications and statements that are required for the particular transaction. <\/li>
  2. Collegiate support:<\/strong> ELN operators (PEXA and Sympli) offer an online platform for lodgment of land dealings and financial settlement, and their offerings are expanding. But like any online service, each provider’s platform will differ, not just from a design perspective, but also from functionality, ease of use and service support. Whilst the legal profession is a collegiate profession, often property law practitioners work on one side of the fence. We need to support each other in navigating these new technologies.  This co-operative approach achieves client objectives and enables practitioners to comply with the conduct rules. <\/li>
  3. Be flexible: <\/strong>Adopt a flexible approach to property transactions. Embrace technology with an appropriate level of caution, but do not resist change. New technology has disrupted all businesses and industries \u2013 the legal profession is not immune. The recent legislative changes to property transactions are a sign that further change will be inevitable. Keep up, or risk falling behind.<\/li><\/ol>\n\n\n\n

    What can we expect to see happen next?<\/h2>\n\n\n\n