Your call is important to us

This is the crap on-hold voice over pithy message you get from HSBC settlements. 42 minutes and holding. What the fuck do they think we do all day? That we as lawyers only have time for 8 calls in the day.

Is it just a bad hair day HSBC?

You are pushing the industry to the limits of melt down. A legal suit may make you wake up. Probably a class action. You are on notice.

PS - The actual time was 53 minutes. The individual we spoke to was the only employee staffing the settlements area. His co-worker was on lunch. Time of making the call was approx 12.25pm 24 August 2006. For the record the phone was picked up at 1:17pm. Reason for the call - Settlement had fallen over and needed to be re-booked. Pretty simple call to make. Opportunity Cost to HSBC - Nil. Opportunity Cost to Hayton Kosky Lawyers $150 per hour - Additional cost to Client - $125

HSBC - Are you serious - 2 employees only?

Actual forget the money. I want my Fifty Three Minutes Back. In that time I could have watched 2 re-runs of Kath & Kim. I could have gone for a 10K jog. I could chugged a couple of crownies with a mate.

If I treated my customers in that way I may as well close the doors.

realestate.com reports strong revenue growth

STRONG growth in the number of visitors to its websites and increased spending by real estate agents on advertising and subscriptions has helped property website group realestate.com.au nearly double its revenue and boost its profit.

Managing director Simon Baker said most of the 88 per cent increase in revenue for last financial year was from "organic growth", helped by more visitors to its flagship websites rather than from acquisitions.

Mr Baker said a better measure of underlying profitability was its gross profit, which rose 134 per cent from the previous year.

Source The Age

Electronic lodgement Stage 1 trials for Banks to begin shortly

It is reported that Stage one trials with EC Victoria involve the testing online mortgage document lodgment are about to begin. The trials will involve only the banks and will involve only two dealings
1. discharge of mortgage
2. registration of a fresh mortgage

Both these dealings are an integral part of the electronic conveyancing process.

According to the Australian Bankers Association, Mr David Bell, the banks that will be participating in this limited pilot include:

• ANZ
  
• Bendigo Bank
  
• Commonwealth Bank
  
• Macquarie Bank
  
• nab
  
• Suncorp; and
  
• Westpac
  

“It is important that we have nationally consistent processes for all participants to follow in property conveyancing, otherwise the advantages of electronic conveyancing will not be fully realised,” Mr Bell concluded.

Question. Will the borrower still sign a Mortgage? I assume the Borrower / Mortgagor will still execute a Mortgage in favour of the Bank, which the Bank will retain on file. The bank obviously wont be lodging the Mortgage over the counter.

Obs: I assume this Trial can only be effective for a Refinance. Logically if you are not registering a Transfer electronically, the Trial will exclude all Sales & Purchases.

We look forward to getting the feedback from the results.

The (un)official word is 2 major banks have already started the trial.

ANZ expands opening hours to meet changing customer needs

The ANZ recognizes that behind any technical advances made online you need to back this up with a dose of old fashioned quality customer service.
More than 80 ANZ bank branches nationally will open until 7pm on Thursdays or Fridays, while others such as the Doncaster Shopping Centre branch will begin 9am-to-5pm Saturday trading.

The ANZ group managing director, personal division, Brian Hartzer, said that the move was made in response to customer feedback and a desire to be more competitive. Mr Hartzer said the bank recognised that many customers were not happy doing complicated transactions, making mortgage inquiries or seeking financial advice online.

"Internet banking and ATMs are fantastic developments, but when people want to talk about their mortgage or they want to talk about their financial needs, they want to do that in a branch," Mr Hartzer said.

In the mortgage business, technology will only ever be half the equation. Without a doubt people make up the other half who are responsive to customer and client needs.

Ford Is Slashing Production 20% in 4th Quarter

News headlines are Ford US is planning to cut by one-fifth the number of vehicles it plans to build in the final three months of the year. Ford and GM are having to deal with rolling losses made even harder by a double edged sword. Falling demand and rising costs. With oil at record high levels, Detroit’s market share has dropped to its lowest level in history, while Asian brands, known for their fuel efficiency, are setting sales records.

Ford cannot continue much longer without a radical change in its business model,” said John Casesa, an industry analyst with Casesa Strategic Partners. Both companies “have got to resize, restructure and reinvent themselves.”

“This is only the resizing,” he said.

Turning the ship around is not that easy for Ford or GM, given the long time lines involved in getting new models to market. Five years is probably the average time. Models being released today, work started on design 5 years ago. Cars being designed today wont see production til 2011.

I see parallels for the conveyancing and mortgage industry. Profits are being squeezed as there is always price pressure on conveyancing and rising costs of wages, rent and overhead. As an industry we have no say in the total level of properties being turned over.

I do however see the benefits of increased productivity via implementing digital and electronic conveyancing mechanisms which will dramaticaly lower the cost side of the equation.

Law firms and conveyancing companies will need to embrace technology to stay competitive.

Financial institutions are always under pressure to lower costs. The industry benchmark for mortgage and loan processing I believe is approximately $300. Can this be lowered to $50? I believe it can.

These changes I see will be brought to being over the next 5 years. Everyone needs to change if they want to stay in the game.

PC problems – upgrade your RAM

Whilst you dont get the Windows Blue Screen of Death so much these days, PCs can labour with having too many windows open, trouble printing large documents and generally grinding to a halt which calls for a reboot.

An agent called me and said he was having trouble printing a 126 page vendors statement. I downloaded the same document from the 247legal website but had no problem with printing it to my Xerox N2125. My PC is 12 months old and has 1Gb of RAM.

The problem I suspect was Nick’s PC needs a memory upgrade.

PCs which are now more than a couple of years old, probably only have 256Mb RAM. And even recently configured PCs have just 512Mb.

The simplest solution is double the memory for all your office PCs. All machines with 256, add another stick of 256. Ditto for machines with a 512 stick of RAM. Double it and your have a PC with 1Gb of RAM. A stick of RAM is about $50. You service your car don’t you.

Office Equipment. Protecting them from power surges

Power black outs or brown outs are not irregular occurrences in our neck of the woods. The power companies are no longer state monopolies and I suspect cost cutting affects maintenance.

Last week a power surge hit us and knocked out 2 PCs and the telephone system. The PCs were fixed by replacing their power supply units. Ditto with the PABX, its power supply unit had to be replaced. The total cost of repairs was approximately $500 plus down time. We will make a claim against the electricity supplier.

What we have done to stop this reoccurring is all essential equipment like the File Server, Routers, Modems etc are all hooked up to a UPS (battery backup). Theoretically these units never shut down.

All other non essential equipment, PC workstations, printers etc, are now plugged into power boards with surge protection. Surge protection power boards are a $20 hardware item.

This weekend backups my own advice - another power interuption, although client workstations had to be rebooted, happy to say no damaged units.The File Server, Router Modem all kept humming along without interuption because of the UPS. Ditto for the automatic daily backup.

Scan everything

How many workplaces scan? I suspect not too many. Yet the legal office and real estate agency are prime candidates.

Our legal practice pretty much only does property and commercial work. When we open a new file for a purchase we scan the Contract of Sale. Ditto when a property is sold the Contract is scanned. This is just the beginning. Leases, wills, title deeds. They all become digital documents. They are scanned, saved, archived and can be retrieved at any time for viewing, reviewing, printing, emailing and even marking up with electronic sticky notes. Best of all they are backed up. It is pretty hard to lose a document.

Yet the other day, I kicked myself for not scanning a police report. No prizes for guessing, the police report just disappeared. I swear I left it with an office assistant on her pile of stuff. This really irritated me but I had no-one to blame really except myself. I am a scan junkie. All those important and not so important personal documents get the once through the scanner treatment – passport, drivers licence, marriage and birth certificates and even the kids class lists. Bingo bango.

How much time is wasted or potentially saved if you and your staff have instant ready access to key client documents. Most estate agencies run a property management division. Why would you not scan each and every residential tenancy agreement or commercial lease?

Conveyancing Bill - Victoria

The Conveyancing Bill was introduced into Parliament this week (August 2006).

Under the Bill, conveyancers will be required to:

• have undertaken mandatory professional qualifications;
  
• have gained at least 12 months relevant practical work experience
  
• not be disqualified, such as having been an undischarged bankrupt or having been convicted of an offence involving dishonesty;
  
• have professional indemnity insurance;
  
• disclose to clients all costs and any commissions received;
  
• actively supervise their conveyancing business;
  
• have their trust accounts audited annually; and
  
• contribute to a Fidelity Fund to compensate consumers who lose money because of fraudulent conduct by conveyancers.
  

The Bill defines the work that licensed conveyancers may carry out, being “conveyancing work” which means legal work carried out in connection with any transaction that creates, varies, transfers, conveys or extinguishes a legal or equitable interest in any real or personal property, such as, for example, any of the following transactions:

• the sale of a freehold interest in land;
  
• the creation, sale or assignment of a leasehold interest in land;
  
• the grant of a mortgage or other charge.
  

The definition specifically excludes conveyancers from a range of legal work, such as commencing legal proceedings; applying for probate or letters of administration; establishing a corporation; creating a trust or will; giving investment or financial advice; the sale of a business; and advice in relation to obtaining consent to a development, an adverse possession application or other legal work as prescribed by regulation.


There also will be some transitory provisions and is not expected to come into effect until 1 July 2008

The Bill can be viewed at www.dms.dpc.vic.gov.au

Conveyancing Companies have been operating in a quasi-legal environment for the best part of 20 years. Conveyancing companies I have no doubt do legal work that should only be carried out by a qualified legal practitioner. Yet conveyancing companies have carried on without fear of prosecution for breaches of the Legal Practice Act.

The Law Institute of Victoria has done too little too late by prosecuting the business of conveyancer Lydia Maric. If there is a victory for legal practice it will be a hollow victory. Regulation of the conveyancing industry is now a foregone conclusion.

Reported by the Australian "Now that the Government has introduced legislation opening the market, the Law Institute should abandon its legal action and pay compensation," Ms Ludwell said. For almost a year, Ms Maric's business has been restricted by a Law Institute injunction that has required her to pay solicitors to complete forms that she considers part of her normal work. While the Supreme Court of Victoria has still not handed down its judgment on the Law Institute's test case, Ms Maric's legal bill from that court action is believed to be about $150,000.

For the consumer will the cost of conveyancing services come down as the government predicts? That's a moot point. I would have thought the compliance costs for conveyancing companies would increase. Theorectically there will be fewer back yard conveyancers as compliance costs make it harder for them to survive as a part time vocation.

I dont think it will be the regulation of conveyancing companies that will have the biggest effect on pricing of conveyancing services, it will be the advent and adoption of electronic & digital conveyancing that potentially will have the greatest effect on productivity and costs of providing conveyancing services.

Stock Fraud

A question I have often asked myself how common is stock fraud given there no longer is any share scrip and share trading operates within the confines of a tightly regulated industry. Until recently I had not heard or read reports of stock fraud within the Australian public companies (ASX) trading environment.

How similar is the Electronic Conveyancing industry for property compared to Paperless Share Trading on the ASX. One common element is just as there isn’t share scrip under EC there wont be any paper or duplicate titles. Updating the Titles Register via Transfers and Mortgages will be executed by licenced lawyers, conveyancers and banking staff on behalf of clients and financial institutions.

Stock Fraud

A report just published by ASIC - Mr Neville John Kakoschke, a former options advisor and stockbroker, has pleaded guilty today in the Adelaide District Court to 27 forgery charges arising from an investigation by ASIC. A further 25 forgery charges were acknowledged.

Mr Kakoschke, of Thorngate in South Australia, was employed as a dealer’s representative of two stockbroking firms, Dicksons Limited, between July 1997 and June 2002, and Bell Potter Securities Ltd, between June 2002 and April 2003.

ASIC alleged that between 13 September 2001 and 11 March 2003, Mr Kakoschke forged collateral lodgement forms thus allowing him to use his clients’ shares without their consent as security for trading on other clients’ accounts as well as for his personal options accounts. This placed clients’ shares worth about $1,283,980 at risk without their knowledge.

As a consequence of Mr Kakoschke’s trading, some of his clients had no further collateral available to enable them to continue options trading. It is alleged that rather than tell these clients the true situation, Mr Kakoschke forged the third party collateral forms and used this collateral to continue trading on these accounts.

The charges are being prosecuted by the Commonwealth Director of Public Prosecutions.

Mr Kakoschke has been remanded on bail for sentencing in the District Court on 29 September 2006.

Predicatively rogue employees or principals may very well be one risk that will lead to title fraud under the Electronic Conveyancing regime. One measure against unauthorised dealings is that when a New Dealing is created under EC, the system wil generate a notification, email or letter, that is sent to the Registered Proprietor giving notice of the proposed dealing. Its an alert to the owner that something is afoot with their property. This is a preventative measure to stop unauthorised dealings ever getting registered. The public will need to be educated to notify the Land Titles Office of any change of address to ensure they receive such a Notice. Perhaps this is a service Insurance Companies could offer to their clients. Or Councils might be given this responsibility. Food for thought.

Then there is always the title insurance angle giving protection to owners and financial institutions against finanical loss for unauthorised or fraudulent dealings I for one will recommend every client to take out Title Insurance. You insure your car against theft, don’t you.

Map of Melbourne - wikimapia.org

What Do Real Estate Agents Do Exactly? Where's the Value and Innovation?

Heres a link to one US consumer's reaction to dealing with his estate agent.

There are lessons herein for any Agent to continually work to lift their game. The best listing tool is word of mouth - recommendation.

One thing the vendor criticised was the Agent didn't suggest ideas on how to improve the look of our home for potential buyers. I had a look at Barb Schwarz's website StagedHomes.com, a service dedicated to preparing your home for sale, giving the home a makeover pre-sale. Have a look at the before and after photos. Also she has a pretty convincing video when America's ABC 20/20 program did a 4 hour makeover. You would almost have to say many homes are poorly presented by their vendors and simply wont attract top dollar. Many a canny investor takes advantage of such properties as opportunity to makeover the investment and add instant value. Look no further than second hand car dealers, they have been detailing cars for years.

I still cant believe Americans get charged a 6% commission.

NECS Operations Description – Another Roadmap

NECS has published another roadmap document – here’s the link. The Roadmap is 50 pages long and does get into a lot of detail on the ins and outs of the end system.

In the introduction there are a couple of interesting bits, one is the outcomes the Banks want.The Banks pretty much hold all the cards in terms of what NECS needs to achieve as a National Electronic Settlements and Registration system

What the banks want
Banks have developed a set of business principles expressing their desired outcomes from consultation on the operation of the NECS among which are:

• common data and process standards for cross-jurisdictional application
  
• as far as possible common data rather than simply a common interface
  
• as far as possible standard templates for registrable documents
  
• common system entry and exit points
  
• deployment of open architecture to enable participants to transmit and respond to data openly as far as possible
  
• electronic settlement as a single financial settlement provider in all jurisdictions
  
• as far as possible harmonised stamp duty regimes among jurisdictions
  
• agreement between all participants on the governance and definition of consistent data and core process
  
• standards, including data configuration and data input requirements
  
• appropriate reporting standards (eg management information systems, audit and compliance, status of applications, traffic, payments, history etc).
  

I cannot see a problem with NECS accommodating the above, except getting the State Revenue Offices to provide consistency on timing and payment of transfer duty. Cutting through the rhetoric, what do the banks really want? It's really simple, a system that operates as though there is a single national titles database. One common point of entry, common data entry, common forms - as it should be.

What NECS is not about
The National Business Model again makes it clear what NECS is not about. It is worth repeating them here.

The NBM does not however encompass the whole of the conveyancing process, and in particular include any aspects of the:

• disclosures required of vendors prior to sale
  
• preparation and exchange of contracts for sale
  
• pre-settlement investigations undertaken on behalf of purchasers
  
• procurement of any insurances required by purchasers
  
• creation of loan documentation by lenders
  
• non-financial aspects of settlement
  
• processes for examining and registering instruments once lodged with a Land Registry.
  

A truly end to end digital electronic conveyancing system
will be a series of interlinked web services solutions that encompass -

1. digital vendor disclosure
   
2. exchange of electronic contracts
   
3. pre-settlement investigations
   
4. digital mortgage and loan documentation
   
5. NECS electronic settlements & registration
   

247Legal is working on its own roadmap and we believe the starting point from its perspective is digital vendor disclosure. Beta testing for the Victorian model is well underway with many estate agents and clients with champion results and feedback.

A final observation about roadmaps. Nothing can beat good old fashioned beta testing and that means ECV getting its pilot underway. Have you got a definite start date? The feedback the users give under the pilot will be invaluable. The system needs to be dead easy to navigate and use. This can only be gotten right through testing and refinement. This also requires clever and inspirational design.

Title Tracking Service

Victoria's Landata has introduced a new Title tracking transaction alert system.

For example you have just signed a Contract of Sale, you can now place a 3 month, 6 or 12 month alert on the certificate of title for the property.

The service alerts subscribers if a mortgage is registered against the title, if a caveat has been lodged or if there is a transfer dealing on the property they are interested in.

Subscribers to the service can track activity on the title between the signing of the contract of sale through to settlement, find out if a property is withdrawn from sale, has been sold or check the progress of a subdivision. The service costs roughly $3 for 3 months or $12 for 12 months.