Paper, Scissors, Rock - The PEXA Rock Is Being Defeated By Paper

[LawyersConveyancing]

We all know the "Paper, Scissors Rock" game. Unfortunately, this analogy describes the situation with PEXA settlements at present.

We think that the future of PEXA is as solid as a rock. It's convenient, it's quick and it's better than the old paper settlement in so many ways.

But, as in the game "Paper, Scissors Rock", a PEXA settlement is easily defeated by a paper settlement. I have had this happen a couple of times now, the most frustrating one being where the other side of my PEXA settlement suddenly cancelled because their client's purchase matter had been brought forward, and there would not be sufficient time to conclude a PEXA settlement and have cheques available for the next settlement.

The solution? They trashed the PEXA settlement in favour of a paper settlement - paper covers rock, so paper wins!

How to avoid this problem? Perhaps it's a matter of always backing up a PEXA settlement with a paper settlement, which means more work for no good reason. The obvious option then is to avoid PEXA entirely and stick to the old paper process, simply to give certainty to all concerned, and to have a stable procedure in place that will always work. I have been told by one conveyancer that she is adopting this approach because, as she put it, "Paper is king, and will be for a long time to come."

May I suggest that NOW is the time to bring "Scissors" into the game, and deal with "Paper" so that it can no longer take priority over the PEXA rock! Otherwise, the whole PEXA concept will lose momentum and stall.

[LawyersConveyancing]

I am finding myself being persuaded by those whom I regarded as e-conveyancing Luddites, that PEXA is just not up to the job, and will never be, until paper transactions become the lesser alternative.

I have no way of making PEXA settlements more efficient or certain. I'm stuck with both the preliminary nonsense (for example, before I can even start I have to investigate too many issues - is the title one that can be processed in PEXA, is the other side registered with PEXA, is the mortgagee registered with PEXA), the clumsiness of process (I'm expected to use a calculator to tell mortgagees the difference between the mortgage payout and the sale proceeds so that they know how much surplus to deposit into the client's account), But worst of all is the uncertainty of not knowing if a bank or other side is going to suddenly pull the plug  on the PEXA settlement, and send me scrambling to put a paper settlement together with insufficient time and a cranky client to manage.

However, I can make paper transactions a lot more efficient. I can have the client exercise self-help in dealing with banks and SRO forms, and I can automate documents more effectively.

I have had plenty of experience now with PEXA settlements in sales, purchases and the lodging of caveats, and I have decided that my time would be better spent developing efficiencies in dealing with paper settlements. Why? Because paper is king.

Unless and until paper defers to PEXA, there is little point in my busting a gut to make PEXA settlements work. Or, to put it another way, when everyone else HAS to use PEXA, then I will too. Until then, I may dabble in the odd PEXA settlement just to keep my hand in but my preferred settlement method will be paper.

(I'm not sure how true it is, but I have heard that in Western Australia all conveyancing professionals will be required to be PEXA capable next year. One in, all in, that's the only way PEXA is going to fly.)

[LawyersConveyancing]

I have just had a client turn on me because a PEXA settlement was cancelled in favour of a paper settlement.

The conveyancer on the other side of the transaction was registered in PEXA, and capable of proceeding with a PEXA settlement, but failed to accept our invitation despite follow ups.

Eventually we had no choice but to withdraw from the workspace and proceed with a paper settlement.

When we attempted to book a paper settlement, our client's bank told us that they could not accept a booking as the settlement had been cancelled entirely, and the discharge process would have to start again from scratch. This upset out client, who sought an explanation from the bank. Our client turned on us for cancelling his settlement after the bank told him that we were at fault for having cancelled the PEXA settlement.

I then had to spend time explaining to the client what had happened, how it had come about, and what we will now do to ensure that his settlement doesn't fail and expose him to penalty interest and costs.

As I have previously stated (see other postings in the category "Paper Scissors Rock"), while paper settlements reign supreme, PEXA cannot advance.

At this stage, PEXA is a bit like driverless cars - a promising future, but what if there's a crash, and who gets hurt and carries the blame if there is a crash.

So far my PEXA car is costing me too much in duplication, wasted time and now the cranky client.

[AnnaHardie]

Hi Peter,

Thanks for speaking with me earlier today. Your participation and feedback is valuable for the development of electronic conveyancing – we are certainly listening and appreciate your efforts to-date as an early adopter of technology.

As the industry transitions to 100% digital we acknowledge that there are some pain points.

PEXA is working with industry on a number of initiatives to address some of the issues you have raised. I've noted two of these below: 

• Victoria’s bulk conversion of titles from paper certificates to electronic (eCT) form. This is the next step towards 100% digital. In the first instance the major banks are converting their titles where they are the first mortgagee on title. You can watch the webinar recording or download the presentation slides. (Slide 12 from the webinar highlights timelines on the industry push to ‘turn off paper’)

• The Qualifier Tool launched this week. This tool helps you to identify files that are eligible for e-conveyancing.

As the network continues to grow and develop it will be become easier to settle online.

Every week there are about 40 new firms joining PEXA. In addition, there are over 100 Financial Institutions, with about 40% already doing transfers and the others working towards being transfer-ready.  

We understand that you’d like to wind-back a little for now. We’re always here to support when needed. I've noted your eagerness to try new tools and processes for us. 

[LawyersConveyancing]

Thanks Anna. I have just finished another post to confirm my commitment to PEXA, and your comments confirm that PEXA is keen to know where the "pain points" are and to massage them.

A huge positive with PEXA is they way staff never attempt to explain problems away. In our conversation this morning I didn't hear any excuses or explanations. Instead, I was asked questions about the issues I've identified and some observations about how these might be addressed.

Later on I received a telephone call from Jonathan Teh, who was also keen to find out more about the hassles we've experienced.

All very reassuring.

[BelindaLeFevre]

Hi Peter,

What you are experiencing is what I call "Early Adopter Fatigue".  My clients in NSW feel it as well!  And I would be lying if I said we at PEXA don't sometimes feel it too.  This is when we need to rally and remember that no one else has done this in the world (both e-lodgement and e-settlement).  If it was easy, everyone would have implemented such a system. 

Keep up the posts - it's great to raise awareness of these issues.  As the Land Registries in each state have started to announce their transition timelines until each document type is required to be lodged electronically, we can expect the industry will move quite quickly from now on.   Already we have seen stand-alone mortgage processing dates released in most states (March 2017) and refinances (August 2017).  A couple of financial institutions are also piloting the initiation of PEXA transactions (don't be surprised if you a receive workspace invitation from a bank) which sends a powerful message to the market.

Hang in there - our efforts will be rewarded!

[LawyersConveyancing]

Thanks Belinda, but it's a bit like the penguins in Antarctica, huddling as the freezing winds lash them. Eventually the ones copping the icy blast decide that they've had enough, and they waddle around to the leeward side of the huddle for some shelter and warmth.

I've decided to waddle over the warm side for a while and to let other early-adopters deal with those chilly winds for a while.

What did it for me was the realisation that we're being tricked by the State Revenue Office. I thought Duties Online would remove the need for me to prepare and deliver SRO documents, when in fact it simply ADDS another layer of hassle. Now I have to do the same as always with the SRO forms, but now I also have to store them on my premises for the SRO for 5 years, freeing up office space and staff for the SRO - and this is in additional to my filling out the online Duties Online form.