I first became a conveyancer (then called a “Land Broker”) in 1978 in Adelaide. I am still amazed at just how fast the 40 years of conveyancing have flown by. I guess it is a testament to just how much I enjoy the work, that time does not matter.
Having reached this milestone I have found it interesting to reflect on those aspects of “conveyancing” which have changed in that time - and those which have not.
What has changed?
Undoubtedly the most profound change has been the uptake of technology.
I recall when new technology was being introduced in the early 1980’s (facsimile machines, mobile phones, computers etc) everything seemed to be priced at around $6,500. That is the equivalent to over $30,000.00 in today’s terms. It was quite common to have 3 or 4 finance contracts in place to acquire such items.
Today, many items (telephone systems, printer/scanners/facsimiles etc) are actually provided free of charge – provided that an ongoing maintenance contract is taken out.
Also, today, we do not even need to draw bank cheques to complete the settlement of a property transaction. EFT is immediate, more secure, less expensive and less cumbersome.
The speed of change has accelerated in recent years with the transition to fully “on-line” settlements. Almost gone are the days when arrangements would be made to meet around a table and everyone produced their documents. cheques etc. Hopefully, all the documents are in order and settlement would be completed. More often than is generally known, there would be a small error in one of the documents (spelling, missed signature etc) and the whole settlement would be called off - often with a purchaser sitting outside their new home next to a removalist van loaded up with all of their furniture – waiting for the go-ahead to start moving in.
This advance in technology is such a revolution in the conveyancing process. Paul Denny Conveyancing conducted the world’s first electronic settlement using the PEXA system in December of 2014. By July 2019, all settlements must be settled electronically
I find it incomprehensible that many sections of the conveyancing/legal profession still resist this important progression – and insist on a “paper” settlement. Quaint, maybe, but very much out of step with the modern business environment.
All of this has had the effect of keeping fees and other costs to our clients very much unchanged. When I first started in NSW in 1993 the common perception was that the “legals” of buying property were $3,000-$4,000. Here we are some 25 years later and the typical cost of “legals” is $2,000 - $3,000!
What has not changed?
The “42 day completion period”.
There is a common conception that a 42 day completion period is “normal” – for no other reason than this has always been the period printed on the standard form of contract used by the profession.
This settlement period was first adopted in the days when “enquiries” to government departments were ordered by the hand completion of a form, attaching a cheque, posting and then waiting days/weeks for the responses to start coming back by post. Today, such “enquiries” are ordered on-line and the responses received either immediately or no later than 1-2 days.
Also – the banks’ documentation processes were cumbersome and many weeks were required for the various stages of approval, documentation and settlement. Not so, today. All of the lending intuitions have streamlined and centralised these processes.
For these 2 reasons alone – there is no reason why settlements cannot be comfortably organised for 3-4 weeks – if that suits the wishes of the vendor and purchaser.
Traditional thinking is that the deposit paid on a purchase must be 10% of the purchase price! There is no legal reason for this. With the massive increase in property prices in recent years a common request we are asked to make is for a 5% deposit. I was recently involved in the periphery of a property sale in Canada – where the deposit paid was just $1,000.00. Upon querying this, I was informed that this is quite normal and not a problem! Whilst my thinking is that this is a little “light-on” I am of the view that a 5% deposit is quite substantial and see no reason why it could not be accepted as the “normal”.
Interestingly, when requesting that a 5% deposit be accepted on behalf of our (purchaser) clients we are often informed by the vendor’s representative that this is agreed – so long as there is a clause inserted providing for the 5% to be paid at exchange – and the other 5% on settlement (stating the obvious I would have thought). The rationale for such a clause is that the vendor can then sue for the other 5% in the event of a default by the purchaser. The only problem? There are several court decisions declaring that such a clause is unenforceable. The question is – why bother inserting a condition that has no hope of being enforced??
I always advise my vendor clients that a 5% deposit is OK - particularly if it encourages more potential purchasers to attend and bid at an auction.
The most important aspect of conveyancing is the relationship we have with our clients. It can be easy to get bogged down in “legalities” and “processes” and lose sight of the fact that we are actually assisting a person(s) through one of the most stressful episodes in their life. In fact, over the years I have realised that our clients are not too concerned about the minutiae of “conveyancing”.
I often refer to the analogy of a sophisticated performance motor vehicle. When the owner takes it in for a service that owner has no interest in what happens under the bonnet and other functions of the vehicle. If the dealer is doing their job properly, the owner of the vehicle has unquestioned confidence that their cherished possession is well serviced and monitored. All the proud owner needs to experience of comfort and performance of the car.
Similarly, with the conveyancing of property. Our clients need to have total comfort that everything is being thoroughly investigated and proper advice given where necessary. This is another positive aspect of modern technology – particularly emails – which assists greatly. The technology and IT we employ makes it very intuitive to keep out clients fully informed throughout the whole buying/selling process. In fact, I cannot imagine trying to conduct such matters without all of this – as indeed I did 40 years ago!
I look forward to continuing my relationship with many valued clients for a few more years yet – aided by a great team of colleagues and the continuing advancement of technology.!