Slow take-up hobbles electronic conveyancing

The Victorian government has hatched a plan to entice users to its troubled electronic conveyancing (EC) project by offering a $500 rebate on conveyancing fees, but there are a few catches.

To qualify, the buyer and seller will in effect be compelled to use the same firm of solicitors and have just two choices of finance, and one would-be user has been asked to come back in a few months.

After seven years of development at a cost of $30 million, Victoria’s EC system – which allows property transfers to be conducted on the internet – will soon enter its second month of operations.

But so far the sole subscribers consist of a suburban law firm, Rennick & Gaynor, and two finance providers; Bendigo Bank and mecu credit union. The state government-owned developer VicUrban is also a subscriber. This means that to use the new system and to qualify for the rebate, the buyer and seller will need to retain lawyers Rennick and will need to have any mortgages arranged through Bendigo or Mecu.

Meanwhile, the state government is harvesting higher fees for paper transactions, which were jacked up in November by an average $30 a conveyance to make EC comparatively cheaper, and EC has been putting off customers.

Melbourne lawyer Brett Hayton, of Hayton Kosky, said his request to subscribe was met with a suggestion that he come back in February.
“It was fantastic that Victoria took steps to go forward with this project. I’m happy to become a user and to provide feedback, and I went to sign up – but you can’t.”
Mr Hayton said he was passed between three employees of Land Victoria over two weeks before being told to come back in February. In the meantime his clients are paying an estimated extra $30 to $50 in government fees for transactions using the old paper system.
“Electronic conveyancing has not lowered the costs of conveyancing. In fact it’s put them up,” he said.

A spokesman for Victorian Environment Minister Gavin Jennings said the incident was a misunderstanding, and lawyers and conveyancers have been able to subscribe since the November 16 launch. Ten have applied and 16 online transactions are in the pipeline.
The $500 rebate is Victoria’s latest bid to entice financial institutions to co-operate with the project. Their participation is essential as they write the bulk of mortgages.

But they have refused to sign on due to infighting between the other states over whether Victoria’s EC software can be turned into a national system. Eight months of meetings, a communiqué signed by state and territory land ministers and interventions by the federal attorneys-general have so far failed to resolve the impasse.
Members of the national steering committee will meet again in Melbourne today.

AFR | Matt Drummond | 14 Dec 2007