This amendment to the state’s Electronic Conveyancing National Law legislation, the Electronic Conveyancing (Adoption of National Law) Act 2012, was introduced to the Parliament of NSW in February.
The goal of introducing these amendments to the legislation was flagged after an NSW ministerial direction from October was published late last year, which also noted the intention for national interoperability to be implemented during the second half of 2023.
Under this amendment, all Electronic Lodgment Network Operators (ELNOs) in NSW must interoperate.
This, in turn, is said to allow customers connected to one of these ELNs to be able to engage in a conveyancing transaction with another customer who is connected to a different ELN.
Further, this amendment will also extend the statutory reliance regime for digital signatures to cover interoperable dealings and increase the Registrar General’s powers.
Under this expansion, the Registrar General is said to be able to “make operating requirements that will specify matters that must be included in interoperability agreements” – a move said to allow for the inclusion of “important customer protections” – as well as requiring all ELNOs to participate in an industry code.
Speaking of the amendment, NSW Minister for Customer Service and Digital Government, Victor Dominello, commented that this is “[a] historic and important reform”.
“Mandating interoperability is expected to deliver net benefits of $83.6 million nationally as a result of reduced prices and time and cost savings delivered by a competitive e-conveyancing market,” Mr Dominello said.
“This reform will result in more choice and fairer prices for customers and greater efficiencies in the property and financial sector.”
ANZ head of home loans John Campbell added that he welcomed the development, stating that the passing of the amendment is “a significant step towards simplifying the process of buying or selling a property”.
“ANZ looks forward to working with all parties in this process as we aim for further improvements in electronic conveyancing that will ultimately help our customers and the industry,” Mr Campbell said.
Chief executive of the e-conveyancing fintech Sympli, Philip Joyce, said: “This is such a vital piece of legislation for the entire industry as we work towards interoperability by 2023, in line with the mandated Ministerial timeline.”
He added that now it has been passed by the NSW Parliament, “it will automatically be passed by the other states”.
However, these amendments have raised red flags for other industry figures. In a statement to Mortgage Business, Australian Institute of Conveyancers national president Michelle Kent said that, while the e-conveyancing body “supports competition in the ELN marketplace and considers interoperability essential”, there are still concerns around security, consumer and subscriber protections, as well as the risk of vertical integration resulting in “an even more ingrained monopoly than we have today”.
Ms Kent said that it is “paramount that these concerns are addressed in the second amendment part of the bill, which we expect to see by the end of 2022”.
She added that if the second amendment does not address these significant concerns, interoperability will result in a loss of security, diminish the integrity of the land registries, add complexities to a transaction and limit consumer confidence in the e-conveyancing system.
“The contribution by conveyancing practitioners is essential to ensure consumers have the safest reliable and risk-free system of ‘interoperability’ that can be provided in these days of heightened cybercrime, security risk, fraud and identity theft,” Ms Kent said.