Date:  13 November 2006

ELECTRONIC CONVEYANCING

For some time now the Land Registry has been working on streamlining the residential conveyancing process by the use of a dedicated central website.

The scheme is expected to be voluntary to start with and a pilot scheme is planned to run October 2007. 

At the heart of the streamlined conveyancing process will be the use of what is called the “Chain Matrix”.  The idea is for the parties in a conveyancing chain to share the use of a common electronic chart (Matrix) to record the progress of the respective transactions, and in that way any interested party will be able to see at a glance how the chain as a whole is progressing, identify where there is a sticking point and thereby focus enquiry where it matters.

The starting point will be for the first seller's solicitor to submit the draft contract from their computer to the first buyer's conveyancer electronically and record the position on the Matrix.  Those involved in the chain will gradually add their name to the chart as the matter evolves, and as each transaction progresses then the conveyancer concerned will update the Matrix accordingly. 

The position on each transaction will become more transparent and synchronizing exchange and completion will become far simpler.

Contracts will be exchanged electronically when the buyer's and seller's solicitors have signalled that agreement has been reached. Paper contracts will still be signed by the parties but the exchange will be electronic. 

The Website will allow for simultaneous exchange of contracts relating to all transactions in the property chain.  The conveyancers will each have electronic signatures for security purposes and in due course payments of deposits on exchange will be accounted for in a central service and paid by electronic fund transfer (“EFT”). 

In the interval between exchange and completion draft electronic transfers and mortgages will be agreed and signed electronically in anticipation of completion just as they are in the existing paper system.

Shortly before completion the parties to the transaction (and all parties in the chain) will signal their readiness to complete in accordance with the terms of the contract, e.g. that all necessary documents have been signed and that all financial arrangements are in place. 

Upon legal completion land registration will take place automatically and electronically.  Similarly Stamp Duty Land Taxes and Land Registry fees will be automatically paid and all other monies passing between the parties will be settled through the Land Registry central EFT service. 

With the help of e-technology the amount of SDLT and Land Registry fees will be correct in virtually all cases in contrast to the present high incidence of errors.

Post completion it is envisaged that no further action would be needed for transfers relating to registered land, it will have all happened automatically.  However where there is a purchase of unregistered land in the chain, it will only be possible to achieve simultaneous completion conditional on registration for that transaction as the unregistered deeds would still need to be examined by the Land Registry in the present conventional manner.

It is anticipated that the EFT process will be excluded from the 2007 pilot so that payment of monies will continue to be as per the existing method. 

When we add together the HIPs strategy that I commented upon last month, and the very real prospect of E Conveyancing as described above, it is clear that the face of residential conveyancing really is going to change within the next 2 years if all goes to plan.

 Clive Vernon