Risk Management implications of Australia’s move to PEXA Risk Management implications of Australia’s move to PEXA

Risk Management implications of Australia’s move to PEXA

18 October 2018 | Cyber

The highly anticipated move to e-conveyancing of property transfers commenced in Victoria on 1 October 2018. Property Exchange Australia (PEXA) is an online settlement platform which now facilitates the lodgement of registry and financial statements, and applies to a majority of conveyancing transactions. The platform is now operating live throughout Australia and is integrated with all State Revenue Offices. In Victoria, it means that if any instrument is signed on or after 1 October 2018, and available in PEXA, it must be lodged electronically. As a result, settlement cheques and paper titles will slowly be phased out, in exchange for an efficient and low-cost settlement regime.


With the anticipated rise of cybercrime in sight (which may involve phishing expeditions, or the use of compromised email accounts to facilitate fraud), conveyancers must act vigilantly and take proper care when electronically processing settlement payments and financial documents.  

Claims of e-conveyancing fraud allegedly facilitated by sophisticated email and hacking scams have already surfaced, reminding all professionals to tread carefully during this transitional phase.

Professional Conduct Obligations

To address security risks, the regulator, Australian Registrars’ National Electronic Conveyancing Council (ARNECC), has introduced various safeguards, in the form of governing rules, to ensure the safety and security of electronic conveyancing transactions. The safety methods extend upon a conveyancer’s traditional duties under the Electronic Conveyancing National Law to also include compliance with PEXA Verification of Identity (VOI) requirements and using a unique digital certificate to electronically sign documents on behalf of clients.

PEXA Residential Seller Guarantee

PEXA has also introduced a Residential Seller Guarantee (Guarantee) which is designed to assist sellers impacted by a compromised electronic conveyancing settlement or fraudulent transaction. The Guarantee allows a seller to make a claim for recovery with PEXA, granting PEXA the power to step into the shoes of a seller to recover losses from a fraudster, or any other party to the transaction, including the acting conveyancer.

In order to make a claim, a seller is required to complete a PEXA Guarantee Claim Form (Guarantee Form) providing details about how the transaction was fraudulent and an explanation as to consequential settlement delays and financial loss. A seller’s conveyancer is also required to provide details about the transaction, in the form of a declaration. This includes the name of the person that entered account details into PEXA, the name of the PEXA user that used their digital certificate to sign off on a settlement transaction, how the fraud was uncovered and how it was reported to police authorities.

Wider Implications for Conveyancers

The Guarantee Form may present some unintended risks to conveyancers in circumstances where they are required to advise PEXA if a person’s identity was not correctly verified, if they were somehow aware of the fraud being committed, or if a member of the conveyancer’s firm participated in the fraud. Specifically, by completing the Guarantee Form, conveyancers may expose themselves to a claim by in effect making admissions in relation their conduct. Such admissions could in turn be deemed to be ‘admissions’ under the conveyancers’ professional indemnity insurance policy thereby amounting to a breach of the policy.

It is clear that the move to PEXA is very much a live and current issue amongst the conveyancing sphere. Whilst we are yet to see how the courts will deal with related liability issues and how the regulator will deal with professional conduct complaints, it follows that conveyancers, practitioners and their insurers should keep a close eye on further developments as they arise.

For further information and resources, visit PEXA, ARNECC and the LIV’s website.


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Chanelle Blasis

Chanelle Blasis

Senior Associate

Hubert Wajszel

Hubert Wajszel


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