UK electronic conveyancing pilots to begin in October 2007

The Land Registry said last week the first electronic conveyancing pilots would begin in October 2007.

Because electronic conveyancing is such a huge change from the current method, the process will take two or three years to be compulsory for all house buys.

Electronic conveyancing will allow the whole process to be conducted online. It will open access to conveyancing information from start to finish via the web.

It will also provide a way for all payments in a chain to be paid simultaneously, with automatic registration of ownership on completion. It is being designed to help reduce the delay and stress of house buying.

Typically this takes about three months - twice as long as in most other European countries. According to the Land Registry, the longer conveyancing takes, the more likely the deal is to collapse through gazumping, gazundering or frustration of parties linked in the house-buying chain.

The registry believes that by moving the system online, it will become faster, more transparent and less likely to see deals fall through.

When it comes into force fully in 2009-10, it will revolutionise home buying. Electronic conveyancing, or e-conveyancing, will speed the process towards exchange, remove the gap between completion and registration, make clear any hold-ups in the chain, cater for simultaneous electronic funds transfer and be paperless.

Anyone who has bought a house will know how frustrating and stressful it can be. Searches can take weeks and exchange can be nerve-racking.

With e-conveyancing all the parties, including estate agents, solicitors, and lenders, will be connected electronically.

The draft contract will be transmitted electronically from the seller's conveyancer to the buyer's conveyancer. Validation checks will authenticate it to keep every stage of the process secure and protect all parties from fraud.

Conveyancers will record on the system the stage reached in each contract. This clears up the frustration of wondering who is delaying the process. Contracts will be signed electronically, exchanged electronically and sent at the same time. No longer will you have to wait for the other party before proceeding to the next stage.

When both parties are ready to complete, registration and completion will take place simultaneously. All fees and payments will be settled through an electronic funds transfer.

Almost all conveyancing searches can now be done over the internet, although sometimes the result still has to come back in paper form.

The benefits of technology will certainly help in other aspects of house buying. It is far less certain if it will solve other problems in conveyancing.

The other unknown is the cost. We are still not aware of the charge for this overhaul of the system, or its cost to users.

Richard Freeman-Wallace is head of property at law firm Watson Burton in Newcastle UK

Comment: Personally I think it is a grand idea to promote electronic conveyancing as a start to finish operation. But, and it is a Big But, I believe the various parts of the system need to be modular. One part handles disclosure. Another part handles exchange of contracts. The next handles the relationship between the financial institution and the client & the client's legal representative. And finally the last part of the process is settlement, stamping and registration. It is far too ambitious to attempt a single start to finish process as described by Richard Freeman-Wallace. Each modular section can be interlinked with the next part of the process. The modular system would be far more robust. There are no inter-dependencies per se. The system can be far more flexible in design. And that's what XML excels at. Create XML standards for data and document exchange and all the separate systems can be easliy interlinked. Keep it simple.