2013 has brought with it some significant news that affects how the settlement process is carried out.
To jog your memory as we speed towards 2014, I’ve compiled five of the biggest pieces of news from this year that affect settlement, along with a short explanation of what they mean for you.
1. A new VOI system
Early in the year Landgate released new Verification of Identity (VOI) regulations in the hope of reducing the risk of fraud in Western Australian property transactions.
In accordance with the VOI regulation, sellers must present identification documents that meet one of five specific identification categories. This needs to be carried out by their settlement agent before the Transfer of Land is executed.
What it means for you: Even though the VOI requirements have been in place for some time now, many sellers begin the settlement process unprepared to present the required documentation, which can delay the settlement process if the ID turns out to be missing.
You can help prevent delays by informing sellers about the requirements of VOI, enabling them to locate the required documentation in a timely manner.
2. Settlement agent’s trust accounts no longer hold repair funds
This year, legal advice provided to the settlement industry indicated that holding extra funds in a settlement agents’ trust account may be a breach of the Settlement Agents Act 1981.
As such, more and more settlement agents will no longer hold funds for repairs in their trust accounts – including Residential Settlements.
What it means for you: Fortunately, there are other ways to deal with required repairs on a property. One option is to obtain a quote on the repairs needed, so that the seller can credit the buyer with the extra funds required at settlement.
3. Changes to the Residential Tenancies Act
Changes to the Residential Tenancies Act 1987 (WA) altered the process of ending a fixed-term lease. Now, ending a fixed term lease requires either the tenant or the landlord to provide a 30-day termination notice.
What it means for you: This change could potentially cause delays when a tenanted property is being sold with vacant possession. If the 30-day notice hasn’t been provided on time, settlement may be pushed back, costing the seller penalty interest.
To avoid such a delay, take the 30-day notice period into consideration when writing contracts, and ensure your settlement agent knows if a tenancy is in place.
4. A would-be scammer was arrested in Nigeria
In August, Consumer Protection and WA Police announced that a man had been apprehended by Nigerian authorities while attempting to collect settlement documents in relation to the settlement of a home in Falcon, WA.
What it means for you: This arrest shows that fraudsters still view Western Australia as a target for property scams, so it’s important that both settlement agents and real estate agents remain vigilant.
Read our article from August for more information on stopping property fraud in its tracks.
5. Electronic conveyancing was announced for 2014
It’s been over a decade in the making, but next year the settlement industry will finally gain access to PEXA, a system that allows us to complete settlements online.
Rather than send an outside clerk into the city, settlement agencies will be able to enter all the required documentation into PEXA and agree on a settlement time ahead of the date. On the morning of settlement, each party will confirm that all requirements are satisfied using the system and the property will automatically settle at the agreed time.
What it means for you: Electronic conveyancing will benefit your clients in a number of ways. Once such benefit is that lodgement will be immediate, which will protect buyers against losing the property during a ‘registration gap’.
What was the most memorable moment for you in 2013? Share your favourite moment in the comments section below.
Image by Bayasaa via Flickr.