Independent research by LIXI

The LIXI White Paper researches the impact of electronic conveyancing in terms of the costs of settlement and the projected benefits of electronic integration.

The research supports tens of millions of dollars in annual savings are expected within the lending industry as national electronic conveyancing comes on line.

LIXI Limited is a not-for-profit, independent, member-based industry organisation established to develop e-Commerce standards and remove barriers to electronic data exchange within the Australian lending industry. Industry participants who are members of LIXI include banks, non-bank lenders, mortgage brokers, aggregators, software vendors, valuers, service providers, mortgage insurers, solicitors and the various land titles offices.

Access the LIXI White Paper site www.lixi.org.au/2009-LIXI-Forum

LPMA commissioned economic appraisal

LPMA commissioned an independent economic appraisal of the planned National Electronic Conveyancing System (NECS) from KPMG of the costs and benefits of introducing the NECS in NSW. Based on the study, operation of NECS in NSW is expected to achieve savings of $50 million each year in conveyancing costs to the NSW economy*. This translates to an expected cost saving for the average conveyancing transaction of $170.

See Economic appraisal of electronic conveyancing in NSW, Final Report, December 2008, (PDF 281 kb). The following information is extracted from the report, pages 3-4 and 45-46.

Economic benefits

The identified economic benefits to industry as a result of electronic conveyancing can be broadly summarised as follows:

• Reduced duplicated data entry and re-work
• Settlement and lodgment savings - no physical attendance required
• Courier and bank cheque savings and
• Certificate of Title (CT) related savings - optional no-CT.

Costs

The identified economic costs to industry as a result of electronic conveyancing can be broadly summarised as follows:

• industry and LPMA IT set up, maintenance and staff training costs
• NECS establishment and operational costs
• time required to complete client authorisation and subscriber administration of users of NECS
• cost associated with the approval of cleared funds in NECS and
• industry support costs.

Qualitative analysis

The following provides an outline of the qualitative benefits of NECS for industry:

Faster lodgment of time-critical dealings

NECS reduces the time required to lodge dealings with the Land Registry. This will ensure that the most up to date property information is available to service providers and clients in the conveyancing process.

Earlier availability of cleared funds after settlement

Financial settlement takes place electronically through NECS. This will mean cleared funds are available to parties in the transaction and the service providers in a shorter time frame than the paper based system.

Automated electronic compliance assurance

Business rules applied to documents prepared in NECS ensure automated compliance assurance for settlement and lodgment. This provides greater certainty that dealings are lodged in registrable form, providing industry participants with notice that they have fulfilled their statutory responsibilities. The use of data standards will also reduce dealings lodged with errors, omissions or inconsistencies.

Automatable business-to-business data exchange

Utilisation of the National Electronic Conveyancing Data Standard (NECDS) and other LIXI standards allows automated electronic exchange of instructions and transaction data. This eliminates the need for duplicated manual data capture, includes automated process status updates and reduces the incidence of errors and follow up communications.

Direct lodgment of dealings after settlement

As well as the cost savings associated with the reduced need for physical attendance at lodgment (or the associated agent fees), NECS also reduces the time required to undertake this activity. Clients and service providers can therefore be assured of lodgment.

Easier access to lodgment for rural and remote communities

NECS reduces the need to physically lodge documents with the Land Registry. This will be especially beneficial for clients and service providers in regional areas of NSW.

Immediate confirmation of lodgment and subsequent registration of dealings lodged in registrable form

NECS will provide immediate confirmation of lodgment. This will promote certainty in the conveyancing process and reduce the opportunity for delays.

Provides for growth independent of availability of skills

Electronic conveyancing will accommodate future growth in volumes and avoid the associated difficulties of recruitment of title examiner skills not readily available in the marketplace.

Higher quality service

Electronic conveyancing will enable Lands to provide a higher quality service to customers in the areas outlined above.

Improve data integrity of the Register

Quality electronic data received in lodgments is likely to reduce registration processing errors and improve data integrity of the Register.

Conclusions

Stakeholders generally consider that electronic conveyancing will result in industry cost savings.