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.

40 or 50 year home loan

Back in May 06 I wrote that the US has introduced the 50 year home loan

Well here it is now reported Westpac and the Commonwealth Bank confirmed they would consider introducing mortgages over 40 or even 50 years.

As I said back then the 40 or 50 year home loan is effectively an interest only home loan. The borrower is hardly making any dent into principal repayments on an annual basis. You better hope that the capital value of your house goes up. Though that is not always the case and is not guaranteed.

And as is starting to be reported, there is more and more middle class default and bankruptcy petitions. Bankruptcy is no longer the reserve for the lower income or failed entrepenuer.

The 50 year mortgage does not help the Borrower ever get ahead in reducing the principal owing on their mortgage and creating a buffer against unexpected hard times. Combine this with 95% Loans, where are we heading?

Am I being overally pessimistic? Interest only loans have been popular for a long time with investors. But for a long time now, first home buyers are buying into an expensive market it may appear a godsend until things start to go pear shaped. A once often quoted rule was banks would lend you 3 times your annual earnings. Now it might be 4 times. But with, say Sydney as an example, the cost of the median house is 8 times your average annual earnings. Things aint easy.

When looking for property The Age claims only 2% use just the internet

Statistics.
There are three kinds of commonly recognised untruths:
Lies, damn lies and statistics.
- Mark Twain

Here's a direct quote from the Age Domain Property Section
"When looking for a property 84% of people use newspapers. 45% use newspapers only and 39% use newspapers and the internet equally. Only 2% use just the internet.

Make of that what you want. Quoting another source 98% of all properties for sale are advertised on the web and are responsible for 50% of all resulting sales.

Let's just do the quick test of listed properties for sale in Brighton & Brighton East

• realestate.com.au 200+
  
• The Age Domain 66
  

The statistics tell me there are at least three times more properties for sale on the net. The ratio is 3:1. And this is only for a single demographic - Brighton - upper income blue chip. I understand areas like the Mornington Penisula the ratio is actually much higher.

The quote from Mark Twain is accurate; statistics are often used to lie to the public because most people do not understand how statistics work. I am not saying the Age is making it up. They are quoting from research carried out by Quantum Research. But you sure do need to question things when statistics are quoted, especially the quotation of favourable numbers.

Agents, vendors and buyers dont lie - they know where the value and utility lies. All too often print advertising for many properties is just not part of the marketing mix.

And I think Murdoch deserves the last word when he forecast a gloomy future for newspapers with the growth of the internet, saying he doesn't know "anybody under the age of 30 who has ever looked at a classified ad".

The owner of the Herald Sun, Sun, Times, Sunday Times and the News of the World, who once described newspaper classified advertising revenue as providing "rivers of gold", now says: "Sometimes rivers dry up".

This is a generational change.

Microsoft Plan for the Future - All roads lead to the Internet

The company detailed how it was spending heavily on building Internet services into its products, but that any payoff from the effort would not come for a few years. Microsoft executives reporting to analysts Washington 27 July 2006

Microsoft’s size and broad portfolio of products, the executives said, would prove an advantage in competing against Google, the current leader in Internet services. Internet search, according to Microsoft, will increasingly become seamlessly integrated into the Windows desktop operating system, Office productivity software, cellphones powered by Windows.

Microsoft executives acknowledge that as computing increasingly gravitates to the Web and often toward ad-supported services, it creates both a technical and business challenge for a company whose great strength is in personal computer desktop software.

But the Microsoft vision is that Internet services can complement rather than cannibalize the company’s traditional business if they are built into products like Windows.

“Microsoft’s current offerings represent a huge advantage that we can migrate into this services world,” said Ray Ozzie, the chief software architect.

TdF is over for 06

spare bikes., originally uploaded by misscaro.

Banks failing in the online environment

The Age reported Four of Australia's largest banks have received the thumbs down in a review of their online banking systems with the ANZ emerging as "the best of a bad bunch".

An independent study by US research group Forrester, found that illegible text, poor layouts and missing information were just some of the major design flaws that forced customers to turn to more expensive call centres and branches, or even to seek out alternative offerings from competitors.

Presentation was cited in the report as being the most common shortcoming of the websites, all of which were hampered either by illegible text, missing content or poor page layout.

"To effectively use its [Westpac's] site, users need the dexterity of a 15-year-old to accurately use the rollover menus, a magnifying glass to read the text, and a lot of patience to made through the material," the report said.

An example quoted was ANZ made its customers click through five pages before they could even get started on a home loan application after attempts to apply directly from the home loan page failed.

CBA lost points because its home page gave no indication that visitors could actually research and apply for a credit card or home loan online, and it was also missing important data such as key credit card fees.

The reported concluded all the Big 4 could take a leaf out of and learn from international peers such as www.bankofamerica.com which uses a tab system to present rates and fees without clutter.

Source The Age - Louisa Hearn

NECS - Updates to the National Business Model

At its meeting in early June 2006 the National Steering Committee guiding the development of electronic conveyancing considered a couple of significant changes to the National Business Model (NBM).

New Definitions of Industry Roles
The announcement by the Victorian Government in January 2006 that it intends to regulate conveyancers in Victoria with a licensing scheme similar to those already in place in NSW, SA, WA, NT and Tasmania provided the opportunity to tighten up the definitions of industry roles that will use the NECS to conduct electronic conveyancing.
The model now provides for three distinct roles:

1. Subscribers, who are the insured user of the NECS and generally a corporation, partnership, government agency or sole trader


2. Users, who are employees or contractors of the Subscriber and work under the Subscriber’s day to day supervision preparing the information required for settlements and lodgments


3. Certifiers, who are Users as well as legal practitioners, licensed conveyancers, or employees or contractors of the Subscriber specially authorised by the Subscriber to certify and sign instruments and settlements on its behalf

These changed arrangements provide a much stronger control framework for the benefit of all participants in electronic conveyancing and their benefits include:

• clear allocation of respective responsibilities in use of the NECS


• full control for Subscribers over who is covered at any time by their professional indemnity and fidelity insurance


• confidence for all transacting parties that only regulated practitioners can certify and sign instruments and settlements


• flexibility for practitioners and non-practitioners to work for multiple legal and/or conveyancing practices


• freedom for practitioners to use the same digital signature certificate with multiple concurrent or sequential employers.

National Licensing of Licensed Service Providers (LSPs)
The previous intention to license LSPs separately in each jurisdiction has been changed to a single licensing system determined and managed by the NECS. The change will:

• reduce duplication in licensing processes


• provide greater market scope for and competition among LSPs


• benefit Subscribers who choose to use an LSP to connect to the NECS.

All jurisdictions and potential licensees are to be consulted on the criteria and process for licensing LSPs. By LSPs I presume this will mean the current list of certificate brokers and possibly legal software providers.

Source Electronic Conveyancing in NSW - Newsletter No. 19

Email - what not to do or how to do it right

My experience tells me that most lawyers and law firms have yet to focus on picking up their game in the technology stakes. I get giddy when I do receive an email from a fellow practitioner with a PDF attachment, the attachment being the firm’s letterhead and correspondence therein. Only yesterday that was the case when I received email correspondence from Dibbs Abbott Stillman as a PDF as well as a PDF attachment of the Lessee’s Notice of Objection. The documents are sent and received exactly as the sender intended, just as if they were sent by Her Majestys Postal Service. This was a clear example of what to do, not what not to do.

I don’t wish to sermonize on what not to do. But if you are going to use email as a delivery mechanism for legal correspondence don’t use the firm’s letterhead by sending a Word attachment. That’s just not kosher for any number of reasons, security and authenticity being the top 2 reasons not to. So most likely your firm letterhead is a Word template. You have just finished typing your correspondence. Instead of printing the Word document to the HP / Xerox Printer, you print to PDF (as long as you have the correct PDF software installed). Attach the PDF to the email. That's all you have to do. And secondly you have an electronic copy for archiving.

Link to an article Please don't send me Microsoft Word documents

Follow the good practice of Dibbs Abbott Stillman.

And that goes double for the Law Firms that dont yet use email and dont have any email address printed on their letterhead. I would say 90% plus of my clients have email. Email does have its problems (spam) and detractors but it is still a fantastic efficient form of communication for legal practices and clients.

Music not a product - its a service

The digital age reflects this new paradigm - delivery of a service - pure and simple.

Download the song.

Ninety eight per cent - 98%

98% 98% 98% 98% 98% 98% 98% 98%

98% of all properties for sale are now advertised on the internet, and half of all sales are transacted primarily on the basis of internet advertising. Source: Real Estate Institute of Australia

98% or even 99% is about as close to 100% as you'll get. There will always be a number of properties that sell without being listed on the net. They would generally be off market transactions or sold after being "just listed". It reminds me of restaurant ratings or even wine scoring. Some guides employ stars like the Red Michelin guide others rank the restaurant on a point scale out of 20. There is one point of view that a restaurant cannot ever achieve a perfect score thus the best score you can achieve is 19 always leaving room for the restaurant to innovate and theorectically do one better. Pierre Gagnaire, famous French chef and Former apprentice with other famous chef Paul Bocuse opened a restaurant in Saint-Etienne in 1992 for which he obtained an impressive 19.5/20 mark in the Gault-et-Millaz Guide and 3 stars in the Michelin Guide.

BTW - have you ever seen a wine given a perfect score 100/100 or would it justly deserve such an accolade ?

So there you have it - property listings online vis a vis restaurant guides.

Spell Checkers - dont forget to use them!

This piece fo gobbledy gook was form a slocitor I have a lot fo repsect fro - What was she thinking ?

"Settlement has now taken place and the full $85,000.00 has been advanced to your client by our clients. The St george loan had bene repoaid and the kleys to your clioents unit wree receioved at settlemtn and have bene giv en to our cleitn soit hand to your client." sic sic sic ....

This was almost topped by a resume that I received where the applicant could not even spell her own address correctly. Also did I need to know that she had been employed as an usherette with Hoyts?

Title Fraud

Do I rightly or wrongly sense a general fear amongst legal practitioners that when the duplicate Certificate of Title is eliminated under the EC regime, title fraud will make a sudden unwelcome appearance, as if it doesn't exist now?

I dont know the statistics on title fraud, but I do know it does exist today. Because there is a Duplicate Title, title fraud is here, it does occur and it is very hard to eliminate. Perhaps title fraud can be reduced by eliminating the CT with better safeguards and procedures in place? Pehaps someone can illuminate us on the current incidence of title fraud in Australia.

How hard is it, to forge the signature of the true owner to transfer the deed to himself? Or forge the signature of a bank official for that matter to discharge a mortgage? To obtain a replacement duplicate of title? To remortgage the title which is the most common title fraud?

Land Registry Victoria collect approximately $1000 for every transfer and $75 for every mortgage and discharge. Perhaps to alleviate fear, a percentage of fees paid can be placed into an indemnity fund. Or possibly in future there is a compulsory levy on every transaction so every property owner is covered by title insurance.

New regulations will require a tighter regime on identifying borrowers are the rightful owner of the security especially when executing the mortgage.

But we live in a fool's paradise if we think title fraud cant or wont happen simply because we have duplicate CTs.



Land title fraud - NSW Law Society Bulletin

In recent Caveats the Law Society has warned the profession about two types of land title fraud which have become apparent over recent times.

The first is the application for issue of new certificates of title by fraudsters pretending to be the registered proprietors. The fraudsters then borrow money against the property, thus seeking to give the innocent mortgagee title propriety over the innocent registered proprietor.

The second fraud relates to forged certificates of title. The forged certificates of title are of varied quality, and a number have apparently been registered.

In regard to the forged certificate of title, Land and Property Information NSW (LPI) is arranging for a much more secure form of certificate, which will include paper with a watermark, secure management of blank documents, foil crests, and individual numbering. These steps should prevent all but the most sophisticated forgeries.

In the meantime, solicitors should consider having certificates of title authenticated by the LPI before certifying title, particularly in matters where there is a refinance on otherwise unencumbered properties (although this is not the only indicator), or better still arrange to have the title deed produced at the LPI.

As to the fraudulent issue of certificates of title, practitioners should avoid witnessing any document unless they personally know the person to whose signature they attest. Solicitors need to be aware that fraudsters are able to obtain a false identity with the use of passports, driver’s licences and birth certificates. If a solicitor chooses to witness a document for a transfer of mortgage or other title documents, the solicitor should be very careful, and at least make copies of the documents upon which certification is relied.

If there is to be a refinance on unencumbered property, it may be worthwhile delaying payment pending registration of the dealings.

April 2003

Identity Fraud - 13 arrested in probe

The Age reports 12 July 2006

ONE of Australia's largest identity fraud syndicates has been smashed after allegedly stealing mail and corrupting bank employees to scam tens of millions of dollars from unsuspecting victims, police say.

Bogus NSW drivers' licences, Medicare cards and Australian passports have been intercepted by investigators, who say they were among the most sophisticated ever seized in Australia.

The gang's alleged mastermind, Oliver Yu, 22, from the northern Sydney suburb of Gordon, is among 13 people arrested in the past two months by the Identity Crime Task Force (ICTF) after a 12-month surveillance operation.

Nine men and one woman, aged 20 to 41, have been charged with 230 offences, and police have deported two Malaysian nationals and released one man pending further inquiries.

The syndicate is believed responsible for the theft of tens of millions of dollars, but police say they may never know the true extent of the gang's crimes.

The ring, recruited "runners" to steal personal information from unsuspecting victims, were specialists in stealing mail, credit card fraud or personal loans. The syndicate, which allegedly operated in NSW, Queensland, Victoria and probably WA and which had links to South-East Asia, allegedly used the identity of individuals and multinational companies, and also created false identities, to steal money from banks.

NSW Police Online - 'It has been alleged that people within the syndicate assumed the identity of individuals and companies as well as created false identities which were allegedly used to obtain money from a number of financial institutions.'

These gangs have specialists who produce the fake ID and documentation and others who execute the fraud. The take is then split amongst the participants paying commissions not unlike any other legitimate business.

Who bears the Loss?

1. The financial institution who has lent the money to the fraudsters. But more than likely they will hold a registered first mortgage


2. The real owner of the property whose property is encumbered and may have even lost their status as a registered proprietor through a fraudulent transfer


3. The land registry - through a claim on the indemnity fund


4. Legal Practitioners and their professional indemnity funds for their unwitting participation

Like all fiascos these things often play themselves out in the Courts.

As you can see – the duplicate CT provides scant protection when we are facing determined gangs of fraudsters of increasing sophistication in identity and document fraud.

Implausible, unthinkable, inconceivable, staggering belief

Having reported on the downright ill treatment Westpac dished out the other week, I get this heterodoxy in today's inbox -

"My name is Luke (surname supplied) from the CBA, today I recived (sic) the discharge of mortgage request from your office via mail. I have completed the request and forwarded this on to our discharge settlments (sic) office to complete, thank you for the discharge authority that was attached, if you have any questions prior to settlement I may be able to help.

Have a good day,

Luke
Discharge Officer
CBD Lending Support (3010 002)"

I picked myself up off the ground and emailed Luke straight back -

"Is this the new Commonwealth Bank – emailing the Lawyer – if its true – that’s a great step in the right direction"

Luke's response right back was -

"Sorry brett but this is just my thing, hopfuly (sic) it will catch on. i personaly (sic) are taking care of the the discharges through out the CBD area, but if there is any thing you need, use me as your point of contact, not just discharges, any question and the least i can do is point in the right direction.

Any way, have a good week

hear from you soon."

110% to Luke at the CBA for initiative - no its not a change in direction or policy at the CBA but one individual taking the initiative. Maybe, just maybe Luke's initiative may as he says catch on.

Vote to rebuild the twin towers

I dont usually get political - this link is to vote for the immediate rebuilding of the WTC. These two mighty reflective towers must emerge once again from the dust of ground zero.
Once they are back again, the face of the nation can be restored and terrorism will have failed for its utter stupidity.

Digital Mortgage & Loan Agreements - UCCC

The path to creating a uniform digital mortgage & loan regime in Australia is riddled with hurdles created by some states embracing the Electronic Transactions (ET) Act and other states specifically exempting the UCCC from the key ET Act.

As at July 2006:
The following states have embraced the acceptance of the digital mortgage & loan (by not creating a specific exemption under their local ET Act) -

• Victoria


• Tasmania


• ACT

The States that look to be transitioning to accept -

• New South Wales - amendments have been passed


• South Australia


• Queensland


• Western Australia

I certainly stand to be corrected on the status of the above. But what goes? Uniform Consumer Credit Code is really a tautology. But really, we have yet to see a Financial Institution embrace any form of digital or electronic mortgage or loan contract. I am certain however this will change.

Comm Bank offers conveyancing in WA

Anyone buying or selling in WA can now have their conveyancing performed by the Commonwealth Bank via a joint venture with Clayton Utz. Effectively the CBA is offering the home loan and the conveyancing together. At the moment the service is limited to WA.

Putting aside the potential conflict of interest that others will raise, in fact the interests of the mortgagee and the buyer are closely aligned. If the buyer's vested interest as the registered proprietor is flawed the mortgagee's interest as mortgagee would also be flawed. The mortgagee's interest is dependent on the buyer / borrower securing good clear title.

My question is how good is the service? I personally would not rate the service provided by any of the Big 4 financial institutions's mortgage & loan settlements' service as any higher than average and quite often below par. I would argue they will have to do better than that.

Conveyancing is often percieved as an under-rated service. Quite the opposite, clients value their lawyers input and advice in assisting managing and structuring their affairs from the family and business perspective. The routine part of conveyancing maybe just that, but it is part of the whole service the legal industry provides every day which clients value.

One point the FinReview article raised was the CommBank conveyancing service had slashed conveyancing fees in the west by 50%. No doubt many will be attracted by the price and the convenience factor.

The CommBank's website is eCommLegal

New Federalism

The Hon Peter Costello MP
Treasurer
of the Commonwealth of Australia

Dear Mr Costello,

Now that you are about to nationalise the State controlled Ports into a single National Ports Authority for the country's economic benefit, having already created the National Electricity Grid, the inland waterways would make a sensible target. Its been a long time since the waterways were used as transport routes given we now have national highways and rail links. You know and I know, it has been over 100 years since States could tax goods passing from one state to the next.

Also, how come England & Wales have a single combined Torrens land database but our State mandarins would argue we need to maintain eight provincial based databases? For that matter why haven't you combined the vehicle registration databases. Wouldn't that mean significant savings in overhead and the ability to track all those stolen vehicles. I believe our crime fighters understand the benefits of tracking criminal suspects when there is a little bit of interstate co-operation. This is not a complete list as you are probably hard working on the realignment of State boundaries into more relevant economic zones. When you have completed the above you have my vote. Anyhow, thanks for putting the issue back on the table.

Or perhaps these are the simple issues that we put to a referendum. Let the public decide.

1. Should the ports be under Commonwealth or State control?


2. Should inland waterways be under Commonwealth control?


3. Should we have a National Land & Property Register?


4. Should we have a National Vehicle Register?

Always happy to offer some unsolicited advice and support,

Yours Faithfully

Link to Age Article by William Birnbauer 06 August 2006
'Crazy' State System costing us billions

double commissions

Litigation sometimes arises involving the agents' commission of business agents and real estate agents. How does this arise? As put by a leading retired QC, Chester Porter: One often hears of people say, "Get lots of agents to sell your property." This advice can lead to trouble. After the sale, two agents each claim commission and often the vendor is in the purchaser's hands as to who was the effective cause of the sale. Some owners have finished up paying two commissions. Porter, who was a leading criminal barrister, says he found these cases difficult.

He makes another observation about the smart, small shopkeeper who kept three sets of books. The first was correct and showed the true position of the business. The second was for the Commission for Taxation and showed a somewhat reduced profit. The third showed a vastly improved profit and was for the prospective purchaser.

Now surely that doesn't happen.

Source Chester Porter - Walking on Water : A life in the Law

world cup 06

, originally uploaded by ...like a chimp with coconuts.

An Essay on The Value of Privacy by Bruce Schneier

Last month, revelation of yet another NSA surveillance effort against the American people rekindled the privacy debate. Those in favor of these programs have trotted out the same rhetorical question we hear every time privacy advocates oppose ID checks, video cameras, massive databases, data mining, and other wholesale surveillance measures: "If you aren't doing anything wrong, what do you have to hide?"

Some clever answers: "If I'm not doing anything wrong, then you have no cause to watch me." "Because the government gets to define what's wrong, and they keep changing the definition." "Because you might do something wrong with my information." My problem with quips like these -- as right as they are -- is that they accept the premise that privacy is about hiding a wrong. It's not. Privacy is an inherent human right, and a requirement for maintaining the human condition with dignity and respect.

Two proverbs say it best: "Quis custodiet ipsos custodes?" ("Who watches the watchers?") and "Absolute power corrupts absolutely."

Cardinal Richelieu understood the value of surveillance when he famously said, "If one would give me six lines written by the hand of the most honest man, I would find something in them to have him hanged." Watch someone long enough, and you'll find something to arrest -- or just blackmail -- him with. Privacy is important because without it, surveillance information will be abused: to peep, to sell to marketers, and to spy on political enemies -- whoever they happen to be at the time.

Privacy protects us from abuses by those in power, even if we're doing nothing wrong at the time of surveillance.

We do nothing wrong when we make love or go to the bathroom. We are not deliberately hiding anything when we seek out private places for reflection or conversation. We keep private journals, sing in the privacy of the shower, and write letters to secret lovers and then burn them. Privacy is a basic human need.

A future in which privacy would face constant assault was so alien to the framers of the Constitution that it never occurred to them to call out privacy as an explicit right. Privacy was inherent to the nobility of their being and their cause. Of course being watched in your own home was unreasonable. Watching at all was an act so unseemly as to be inconceivable among gentlemen in their day. You watched convicted criminals, not free citizens. You ruled your own home. It's intrinsic to the concept of liberty.

For if we are observed in all matters, we are constantly under threat of correction, judgment, criticism, even plagiarism of our own uniqueness. We become children, fettered under watchful eyes, constantly fearful that -- either now or in the uncertain future -- patterns we leave behind will be brought back to implicate us, by whatever authority has now become focused upon our once-private and innocent acts. We lose our individuality, because everything we do is observable and recordable.

How many of us have paused during conversations in the past four-and-a-half years, suddenly aware that we might be eavesdropped on? Probably it was a phone conversation, although maybe it was an e-mail or instant message exchange or a conversation in a public place. Maybe the topic was terrorism, or politics, or Islam. We stop suddenly, momentarily afraid that our words might be taken out of context, then we laugh at our paranoia and go on. But our demeanor has changed, and our words are subtly altered.

This is the loss of freedom we face when our privacy is taken from us. This was life in the former East Germany, or life in Saddam Hussein's Iraq. And it's our future as we allow an ever-intrusive eye into our personal, private lives.

Too many wrongly characterize the debate as "security versus privacy." The real choice is liberty versus control. Tyranny, whether it arises under threat of foreign physical attack or under constant domestic authoritative scrutiny, is still tyranny. Liberty requires security without intrusion, security plus privacy. Widespread police surveillance is the very definition of a police state. And that's why we should champion privacy even when we have nothing to hide.

http://www.schneier.com

Bruce Schneier is a pre-eminent expert on matters of security and is a strident critic of government's mindless reactive responses to perceived security threats

Home Information Packs - UK Vendor Disclosure

An excellent article on the introduction of the Home Information Pack (HIP) for the sale of property in England & Wales as from 1 July 2007. The article was published on thisismoney.co.uk.

The guts of the HIP that the Vendor must supply is -
The pack will include the following documents, most of which are currently provided later in the sale:

• terms of sale
• evidence of title
• replies to standard preliminary enquiries made on behalf of buyers
• copies of any planning, listed building and building regulations consents and approvals
• for new properties, copies of warranties and guarantees
• any guarantees for work carried out on the property
• replies to local searches
• a home condition report based on a professional survey of the property, including an energy efficiency assessment.

Also, for leasehold properties:
• a copy of the lease
• most recent service charge accounts and receipts
• building insurance policy details and payment receipts
• regulations made by the landlord or management company
• memorandum and articles of the landlord or management company

The article answered many other questions
Will failure to provide a home information pack be a criminal offence?
By how much will the new system speed up transactions?
Will the packs add to the cost of buying and selling, and who will pay?
What about sellers who cannot afford the up-front costs?
What are the benefits of the home information pack?
Won't preparing the pack simply shift delays to the beginning of the process?
Isn't it unfair to put all this extra responsibility on sellers?
Who will actually compile the home information pack?
Will anyone be exempt?
What will the home condition report cover?
Will the home condition report include a valuation?
What will the home condition report cost?
But will buyers trust a report commissioned by the seller?
Will mortgage lenders trust the home condition report?
Won't home condition reports become out of date and have to be repeated?
Will there be enough home inspectors available to do the job?
What about new homes?
The changes will not prevent gazumping, why not just ban it?
Why not adopt the Scottish system, where an offer is binding once accepted?

THe second last point is one of the most interesting ones, tho not directly relating to the HIP, is why didn't the changes end gazumping? I haven't got my head around the gazumping issue in that seems there is no certainty until settlement is concluded.

Vendors will now have to pay a significant upfront cost in preparing the HIP because of the provision of the home condition report.

Another interesting quesiton is who will have to actually compile the report. According to the answer is the person marketing the property will be responsible for ensuring that the pack is available. This would normally be the seller's estate agent but could be a builder, property developer, solicitor, or the sellers if they are not using an estate agent. There is no legal requirement the HIP has to be prepared by a lawyer.

The article included the following paragraph which has relevance to 247legal and NECS
"The Office of The Deputy Prime Minister (ODPM) is responsible for the new regime. It says Hips will ensure important information is provided up front at the very start, and electronic conveyancing will speed up the transaction once a sale has been agreed. 'Taken together, both of these measures will help create a faster and more efficient home buying and selling system.'" That's been my argument for some time. Interesting.

Identity Verifications in Electronic Conveyancing

In the current paper- based process of conveyancing, legal practitioners, licensed conveyancers and financial institution officers prepare instruments and in most cases have their clients sign the documents in front of a witness who also signs. While practitioners, conveyancers and banks have a duty to ensure that the person they are dealing with is who they say they are, they also rely on the person to certify the correctness of the information in the dealing by signing it in front of a witness.

Replacing Traditional Signatures

In electronic conveyancing, electronic instruments and dealings will be digitally signed by legal practitioners, licensed conveyancers and authorised officers of banks and other lenders. They will certify the correctness of the information as well as having carried out and documented a prescribed process to verify the identity of the proprietor or other transacting party they are representing. In the absence of a personal signature of the proprietor or other transacting party on the instrument, the Land Registry will entirely rely on the practitioner’s certification in changing the details recorded on its Torrens Register.


No Need for Signature Witnessing

In electronic conveyancing it will not be necessary for the digital signatures of practitioners and authorised officers of financial institutions to have their signatures on instruments witnessed. This is because practitioners and authorised officers have their identity independently verified as part of the process of being issued with a digital signature.

Identity Verification Procedure

The identity verification process that practitioners will be required to follow is expected to be prescribed in regulations. The process will be consistent with the obligations placed on financial institutions by the Commonwealth’s Financial Transaction Reports Act 1988. This Act prescribes the 100-point identity verification procedure currently widely used by banks and other lenders. If and when this legislation is replaced under the Commonwealth’s anti-money laundering and counter terrorism financing proposals, the new procedure replacing the 100-point check will become the basis for identity verification in electronic conveyancing.

Special Arrangements for Long-Standing and Remote Clients

To supplement the procedures used by financial institutions in verifying the identity of their clients, special arrangements are intended for practitioners to vouch for the identity of long-standing clients and to rely on the certifications of other practitioners when representing clients from remote areas. These arrangements will balance the need for closer attention to identity verification with the practicalities of representing clients in certain circumstances.

Certifying Compliance with a Prescribed Procedure

Practitioners certifying having properly carried out and documented a prescribed procedure to verify the identity of a client are certifying compliance with the procedure only. They are not certifying the client’s identity or in any other way “guaranteeing” that the person is who they say they are. Practitioners able to adequately demonstrate having complied with the prescribed procedure, will be able to confidently defend against their negligence having contributed to a loss from their client’s identity fraud.

Identity Document Verification

The Commonwealth Government is currently testing a new service that will enable practitioners to verify the authenticity of documents presented to them as proofs of their client’s identity. The service, to be available over the Internet, will allow practitioners to be confident that a birth certificate, passport or driver’s license, for example, has been issued by the relevant State or Commonwealth agency in the same name and with the same particulars as a document presented to them by their client as a proof of identity. While this new service when it becomes generally available will not prove that any document is genuine, it will allow greater confidence to be placed in the document because its details match those on record with the relevant government agency.

National Consistency

It will be of assistance to practitioners dealing with clients in more than one jurisdiction for the required identity verification procedure in each State and Territory to be the same. This issue is expected to arise in the national consultation on electronic conveyancing issues due to commence shortly.

Source: Electronic Conveyancing in NSW - Newsletter No. 17

Online vs Offline 3:1

A recent posting declared the death of residential leasing listings in the Age Classifieds.

I figure well is the same happening to real estate listings for properties for sale? It is but it's not over yet.

A quick comparison for properties listed for postcodes 3186 & 3187 (Brighton & Brighton East) for Saturday June 24.

The Age - 54 listings
Domain* - 162 listings

That's exactly a 3-1 ratio

A quick comparison of the 3 main agents in the area

Hodges. 9 in the Age and 37 on the web - ratio of 4-1
Buxtons. 15 in the Age and and 42 on the web - ratio 3-1
Hocking. 10 in the Age and and 32 on the web - ratio of 3-1

Conclusion. The current ratio is 3-1 online digital vs offline print. For every property listed for sale in The Age there are still 2 properties for sale not listed in the Age. That's quite significant. Admittedly the sample is quite small, the trend is not.

I predict that when the portals add Google type mapping the ratios will increase by a significant factor again as the buyers will able to zone into the precise areas they want to buy. Mapping is not something print can offer.


*realestate.com.au was roughly the same as Domain

The Transfer of Land - Missing in Action

The more you think about it, the more I, we you cannot wait for the commencement of Electronic Conveyancing. I would figure at least three times this year, the Transfer of Land document has been "lost" prior to settlement. Somewhere, somehow our client or the other side's client has not returned the executed Transfer in readiness for settlement. So what do we all do in the collaborative spirit of making settlement happen? If we are acting for the Purchaser, we email our client an Annexure page (A1) and have them print, sign and courier or express post the A1 back to us. The solicitor for the Vendor does the same with the actual Transfer and the two documents are married up at the actual settlement.

I am physically over it. I dont get involved. My staff know the routine and the job gets done. Its no-one's fault. The system is the problem and the mortgage and legal industry need to work hard to change, to embrace innovation and to change. Forget the excuses.

The securities industry eliminated this farce 10 years ago.

Web 2.0 Innovation

Web 2.0 - The Fin Review asks what it means?

"Web 2.0 portends a sea change on the internet. Web 2.0 sites are not online places to visit so much as services"

Flickr - photo sharing
Wikipedia - collaborative online encyclopedia
MySpace
Google - are just a few examples

The list goes on - but all such sites demand participation and interaction.

As the Fin concludes Web 2.0's impact has yet to be felt with business.

Digital Conveyancing & Vendor Disclosure - Digital Mortgages - Electronic Conveyancing & Settlements. Web 2.0 will transform the property mortgage and conveyancing services to an online collaborative process where the customer wins so do the legal & financial sectors. 247legal is just the first pioneer for Web 2.0.

Westpac - The Black Hole of Calcutta

Something not so amusing - but you have to laugh to maintain sanity. This time its Westpac's turn yet again. A simple request for mortgage payout figures elicits not a single response from Westpac Adelaides mortgage settlements area after SIX FAXED REQUESTS plUS FoLLOW uP pHONE cALLS.

Is this section run by Westpac or EDS? ITS a JOKE. and nOT funny. In such cases we now refer clients to the Banking Ombudsman. And I call upon every Lawyer and Conveyancer to do the same. At least in one case our client received compensation.

If the message is not clear - your systems are understaffed, non accountable and broken.

view the offending
Copy Faxed Instructions to Westpac sent on the following days

1. 26 May 2006


2. 3 June 2006


3. 5 June 2006


4. 9 June 2006


5. 16 June 2006


6. 19 June 2006

Seriously, if you want solutions and to provide world class service to your clients, consult the writer at 247legal.com.au for technical consulting services and digital conveyancing and mortgage solutions.

This storey is not dissimilar to the AOL / Vincent Ferrari - "I just want to cancel my account." - 21 times later

Serviced Apartments – a 5 year review

The real test for how a service apartment investment is performing comes around once every 5 years. That’s generally how long the term of the lease is before the operator or tenant exercises its option to renew and the rent review to market takes place.

The general framework for a Serviced Apartment Lease has the following facets:

1. The initial rent was set at an attractive yield of say 6.5% of the Sale Price


2. Annual rent increases were fixed, say 3% per annum for the term of the Lease, usually 5 years


3. The Tenant pays recurring body corporate fees


4. The Landlord paid rates and expenses of a capital nature such as sinking fund contributions


5. The Tenant has multiple options, usually 4 x 5 years


6. The Landlord will be up for refurbishment costs, such as re-carpeting and painting to maintain the standards for a serviced apartment operation. Factor in $10 to $15K every 5 – 10 years

There are certainly attractions to the long term investor in the serviced apartment model as presented above which is why they have sold very well to the investor who is attracted to the passive investment model.

Cracks however have started to appear in the model which should be of great concern to the Service Apartment Franchisors if they want to protect the industry’s reputation.

The biggest crack is the 5 year rent review to market and Landlords are seeing drastic rent reductions. One example is a Sydney Serviced Apartment Operator who has put to his Landlords rent reductions of between 25 – 47%. When a valuer is appointed and makes a final determination is yet to be seen. This is the worst example I have heard so far but it is not an isolated example of operators seeking wholesale rent reductions.

Many landlords will be looking for the exit door but what effect does rent reductions have on the re-sale value of their investment is obvious. Not only that, the whole industry is put at risk when the industry's reputation is damaged by precedent that is now being set by tenant operators.

Wikipedia & Conveyancing

Wikipedia is the online encyclopedia that "anyone can edit". Wikipedia has become a symbol of the potential of the Web. Wikipedia has its stumbles and sometimes a revert war can erupt - changes back and forth between a couple of contested contributors such as the Christina Aguilera entry which was frozen for a week after fans of the singer fought back against one user's efforts to streamline it.

The bulk of the writing and editing on Wikipedia is done by a geographically diffuse group of 1,000 or so regulars, many of whom are administrators on the site.

"A lot of people think of Wikipedia as being 10 million people, each adding one sentence," Jimmy Wales, Wikipedia's founder said. "But really the vast majority of work is done by this small core community."

The core success of Wikipedia can be attributed to the simple concept of collaboration and much less on individual contribution.

The same goes for the conveyancing process. Today in the offline paper world which conveyancing and mortgage processing is, the process relies on collaboration of multiple parties each serving the vendor, the buyer and the mortgagees. Electronic and Digital Conveyancing will simply evolve into an online digital state based on the simple concept of collaboration.

Certificates of Title in Electronic Conveyancing

What happens to Certificates of Title when electronic conveyancing is introduced?

This is one of the key issues to be resolved in developing the detailed arrangements for electronic conveyancing in NSW.

In the existing arrangements for conveying a property, the Certificate of Title (or CT) plays an important role in identifying the person entitled to deal with the property – either the proprietor (if the property is unencumbered) or a lender (if the property is mortgaged) – and in retaining control over the registration of subsequent interests that may affect the lender’s security. The CT is brought to the settlement by either the vendor or a discharging lender and handed to the purchaser or a new lender together with the instruments necessary to transfer ownership and, if necessary, discharge an existing mortgage and register a new mortgage. While holding the CT after settlement, the purchaser or new lender can be confident no other transfer or mortgage will be registered before they lodge their instruments for registration.

In an electronic conveyancing environment the role of the CT must change. With settlements taking place electronically without the physical meetings held today, a CT cannot be handed over to a purchaser or new lender in the same way. What happens to the CT in the future will depend upon what is agreed among all key stakeholders on three roles the CT plays in the current paper-based conveyancing system. These roles are:

1. as an indication to practitioners that their client is entitled to deal with the property


2. as an indication to purchasers and lenders at settlement that they are dealing with the person or business entitled to deal with the property


3. as an assurance to purchasers and lenders after settlement that another purchaser or lender cannot register a competing interest in the property ahead of them. The CT gives purchasers and lenders time to lodge their transfers and mortgages without fear of being beaten to the Register by another purchaser or lender.

There are a number of ways these roles can be maintained in an electronic conveyancing environment. Over coming months this will be one of the issues widely discussed in National Consultation Forums about to be set up by the National Electronic Conveyancing Office and the most desirable outcome will be a common arrangement in all States and Territories.

One approach could be for:

• a CT to be issued only for unencumbered properties and not issued where the property is mortgaged. Persons dealing with the owner of an unencumbered property would still need to ensure that they receive a valid CT at or prior to settlement. Practitioners and authorised officers of lenders would certify to holding the CT and retain it with other documents supporting the transaction.


• where a CT has not been issued, the controlling party (the party having the right to deal, usually a lender) would be clearly indicated on the Torrens Register for the property and would appear on all public searches of that title. This would ensure that anyone searching a title record can readily identify who is entitled to deal in the property and whether or not a current CT has been issued.


• where a transaction involves land for which a CT has not been issued, the controlling party would be able to transfer the right to deal electronically. This may require the inclusion of a new document type in electronic conveyancing.

The future arrangements for the CT need to be thoroughly explored to ensure that whatever decisions are made the current integrity of the conveyancing process is preserved and electronic conveyancing is convenient and easy to use.

Source: Electronic Conveyancing in NSW #16
Please Note - The above is provided with a view to elicit comment and generate discussion. It is not intended to prescribe Lands position in respect to the manner in which the issue(s) discussed will be managed in an electronic conveyancing environment

My personal view - I believe we need to embrace a system of No CT. It is up to us and Government to design and devise a system with No CT with the checks and balances as part of the system to reduce the incidence of fraud. How much fraud exists under today's current paper system and in the past? How much fraud has occured under CHESS? Should a compensation fund be created? Should the system be underwritten by Title Insurance? This will be the hot topic going forward. Brett Hayton

Digital vs Print - and the winner is .....

From next week Guardian journalists are to embark on a "landmark" change in the way they work by publishing all news stories on the newspaper's website up to 24 hours before they come out in print.

The change reflects the fact that while the print edition of The Guardian sells 374,580 copies a day, Guardian Unlimited has 12.9 million "unique users" a month, mostly from outside the UK.

Guardian editor Alan Rusbridger told Press Gazette: "It seems to me that the move to a situation in which the digital edition becomes as important, if not more important, than the print edition — some would argue that's already happened at The Guardian in terms of our global presence — seems to me to be inevitable.

"The advertising is already going that way. I think it's not viable for newspapers to carry on with a once-a-day print deadline because that's the way that we've done it for 200 years.

"If we don't wake up and realise we are competing with people on a daily basis who are beating us by 12, 18 and 24 hours on stories, then we are heading to irrelevance."

Digital vs Print - The only survivor in the digital vs print world will be books for the foreseeable future. As for everything else ...

Hostility to Change

Monash Law Faculty recently held a public forum to encourage debate amongst lawyers about Electronic Conveyancing. When it came to question time, why is it most contributions are innately negative and sometimes positively so off the mark I wonder why they bothered to turn up. Surely they are not representative of the majority. Perhaps such attitudes, beliefs, fears are widely held. It wouldn't surprise me in the least.

Example 1. Settlement has just occured. Is it possible to undo settlement to put the parties back into their position pre-settlement? Simple answer is No. Faaaaack. In my 20 odd years I cant recall undoing any settlement. As soon as I have bank cheque in hand - I'm out of there.

Example 2. I have a cash buyer. Now the client will have to pay stamp duty at settlement and not delay for 3 months. Answer - whilst NECS is not compulsory dont use NECS - stick to the paper, physical settlement routine. Second the problem with stamp duty is not the timing of payment its the fact that bracket creep has put everyone in the unfortunate position of paying 5%

Unfortunately the legal profession is conservative and slow to change plus the voice of the naysayers are often too loud. The good news is they will be the ones left behind and wont know what happened until its too late to change. Gen Y will just takeover.

Gen Y - they run fast & play hard

Within the next five years GenY will make up 40% of the workforce, today it is 20%.

The common attributes of Gen Y are they are agressive, they're hungry to suceed and they want time away from the office. To use a sporting analogy, they run fast and they run straight. They like to play hard. (dont we all)

In the workplace, they dont want to push paper. lets face it they are technology savvy and they dont care how things used to be done.

The Legal industry and specifically the conveyancing and mortgage industry should be concerned with this generational shift. If the industry does not change, ie get smarter, expect attrition. Gen Y just wont tolerate the paper crap and the inefficiencies of an offline paper world. (didn't the securities industry change over years ago?)

But for those that do adopt and evolve they can expect to reap the rewards and the profits. My previous post concerned incremental changes. Not good enough. We need big bang changes.

credit for quotes above - Business Sunday

"big bang" changes or upgrade incrementally?

NECS is an example of big bang changes. It is reported by AFR that Telstra executives had plumped for the riskier of two choices by pushing ahead with a "big bang" replacement of back-office computing operations. A $1 billion replacement of the spaghetti-like tangle of software and hardware that runs the carriers business is a key plank in the Telstra transformation strategy.

The carrier has 1200 business and operational support systems, and the move is to cut 900 systems in three years. As pointed out its not a technical issue, it's about return on capital. Its all about ROI and operational savings.

The article points out the banking sector has spent hundreds of millions of dollars over the years to build humungus new systems - and $600M later, they have no ROI. Now I am not sure where the journalist Emma Connors comes up with these numbers. Though I do remember reporting over the years banks missing the mark on technology investments.

Back to NECS - they too will ending up investing substantially in a whole new business model for settlements and lodgements. Their ROI will come but over many years, certainly not short term. What NECS is doing is big bang but it is also incremental given over the past 25 years they have been creating a land title database and imaging of plans and encumbrances. The next steps Land Registry are taking are two fold. One is improving the processes for lodging and registering Plans of Subdivision. I understand that trials are continuing with surveyors and councils. I would be interested to hear feedback on this. I believe the Eureka Tower was one of the first to be lodged electronically. The other step is electronic lodgment. Trials with banks are about to begin, soon.

Back to the banks - now I believe the banks need to overhaul their mortgage and loan processing, not with incremental changes but with a big bang overhaul. Don't just look to NECS because they aren't about solving this one, they are about lodgment. In the past you have looked at outsourcing, but really this has just resulted in more of the same, more or less. Digital loan and mortgage documentation and processing is the answer. Turn loans and mortgages into digital instruments together with digital processing and there you have not just innovation you have a huge ROI on technical investment.

EC NSW - Some statistics on dealings

What Dealing Types will be Possible in Electronic Conveyancing?

Not all of the existing 74 registrable dealing and instrument types in use in NSW will be available in electronic conveyancing. Which ones are chosen for implementation in NSW will depend upon how often they are used, how suited they are to an electronic format, and whether any special circumstances warrant their inclusion or exclusion. Consultation with industry will be necessary before final decisions are made.

The most likely ones

The principal objective of electronic conveyancing is to accommodate the most common dealing types – those required in the sale of a private dwelling, for example. These transactions typically involve a discharge of mortgage, a transfer and a new mortgage. These three dealing types alone account for 86% of all documents lodged in NSW at present and a majority of them are straightforward and therefore suited to electronic conveyancing.

Others that will be considered

After discharges, transfers and mortgages, the next most common instrument types are: caveats, including withdrawals (2.3%), leases (2%), transmissions (1.4%), name changes (1.3%) and notices of death (1.1%). Which of these are made available in electronic conveyancing will be the subject of detailed analysis and consultation in the months ahead. Caveats including withdrawals, transmissions, name changes and notices of death are most likely to facilitate maximum use of electronic conveyancing.
Some Issues Involved

Implementing electronic conveyancing will also require some changes to the way existing dealing types are used.

Transfers are likely to be made up of two separate but counterpart components, where the practitioner acting for the vendor completes one part and the practitioner acting for the purchaser completes the other. The electronic conveyancing system will ensure the information contained in both counterparts is consistent and the counterparts are linked. Mortgages are also likely to be made up of two separate but counterpart components, one for the purchaser’s practitioner to complete and one for the lender’s representative to complete. Mortgages and their associated memoranda will also need to be standardised and Notice of Sale data integrated with relevant dealings.

Each dealing type included in electronic conveyancing will be made up of standardised and fixed operative words interspersed with data fields. A unique dealing type identifier will be used to insert the standardised operative words among the data fields to produce the instrument for uniform screen display or printing during preparation, during examination after lodgment, or as the result of a public search after registration. The specific requirements for electronic instruments are likely to be prescribed in legislation in an equivalent manner to the existing requirements for paper instruments.

Source Electronic Conveyancing in NSW - Newsletter No. 15

• A lot of the above is not new news. What is news is the introduction to the concept of Counterparts and execution by practitioners. Transfers I can understand will be signed off by Practitioners for the Vendor and Purchaser. But why the concept of Counterparts? I would have thought the obvious is a common data set that each Practitioner approves and signs off. Interesting that EC-NSW throws this tidbit out about Counterparts but no explanatory memoranda. Come on guys, why two counterparts?


• Also new news is the concept of "Mortgages are also likely to be made up of two separate but counterpart components". Now here is something I dont think Practitioners will feel all that comfortable with and that is executing Mortgage Counterparts on behalf of Mortgagor clients. And is it all that practical? There are better solutions than this and they dont involve Legal Practitioners executing mortgages on behalf of clients. Forget Practitioners. Borrowers and Mortgagors should deal direct with the banks. There is a real solution which involves secure electronic files and the client signs a document referencing the unique electronic file. Not hard really.

Online vs Offline Classified Advertising

NYT - IN the matchup between the print and online versions of newspapers, signs of the Internet's ascendancy are growing stronger. As Colby Atwood, a newspaper analyst and a vice president at Borrell Associates, put it, "The tail is beginning to wag the dog."
According to estimates released on Friday by the Newspaper Association of America, newspaper print ad spending in the first three months of 2006 increased only 0.3 percent, to $10.5 billion, over the corresponding period last year. At the same time, spending for online advertising surged 35 percent.
"I think the handwriting is kind of on the wall that there is a large migration to the Web," Mr. Atwood said. "Increasing amounts of revenue and focus should be on the online properties. This is a transition that's taking place over several years here. It's not happening overnight, but it's definitely happening."
The numbers are still small compared with print: the first quarter of 2006 produced $613 million in online advertising, up from $454 million in the year-ago period. But it is the eighth consecutive quarter of growth for online ads, according to the association.

Work Life Balance

Current conveyancing practices lock us into the rigid 9-5 work ethic and clocking up overtime to meet deadlines. Current conveyancing practices also dictate that the work has to be done at the office where you have access to the file, the fax and the copier. Even if you wanted to work from home what can you do? You could take a file or two home with you and make a couple of phone calls. There just aren’t many options that a conveyancer can avail themselves if they want to have some flexibility.

Yet as reported by the FinReview, a quarter of the workforce is doing some work from home but it’s chiefly because people are trying to catch up on what they failed to finish at the office. All too often conveyancers are staying back after hours to complete auction documentation, collating and photocopying voluminous documentation for the upcoming auction

The ability to work in the office and from a home office would suit many people.

Technology is the answer. Online digital solutions will facilitate productivity by shifting the focus from offline paper to an online digital alternative. It will facilitate flexibility. Conveyancers will be able to work at the office and at home. The majority of conveyancers are women. I don’t think that is disputed. Trying to achieve the work/life balance is the holy grail. Part-time work, job sharing and flexible work place options are very important to raising kids and the demands placed on all of us outside work. Don’t get me wrong, working in the office amongst colleagues and with supervision and support is still the primary option.

Conveyancing – online, offline, digital – what goes?

For a start law firms just need to start waking up and making a concerted effort to keep up and start focusing on internal work practices. Digital and electronic conveyancing solutions are part of it. But the firm needs to focus on simple available solutions and start using them. Shun the fax. Shun the photocopier. Think, document scanning, PDF. email

Why? You are simply not providing the optimum work environment for your staff.

I want to drop my kids off at school a couple of days each week. Well I can if I can do some work from home before 8.30.

Sale with the Candle

In 1962, Michel* had bought his doll's house restaurant at what the French call vente a la chandelle, a colourful but nerve wracking style of property auction dating all the way back to fifteenth century. The auctioneer opens bids by ceremoniously lighting two candles - or rather tallow wicks - one slightly longer than the other. The bidding follows on briskly, because the wicks last no longer than fifteen or thirty seconds. The first candle goes out (the tallow's greasy smoke the indisputable sign of its extinction), and then the second, giving bidders one, last chance, because at this moment the auctioneer lights the third and final wick, and the suspense mounts as the bids fly. The last one to shout or to make a sign before the third candle winks out or the black smoke rises is declared the winner. The Pot eu Feu, situated on an impase next to some old factories in an undesirable corner of Asnieres, wasn't exactly a prime piece of real estate. Michel got it with a princely bid of 18,000 francs - about $3,600 at the time.

For the third and last time ........

*Michel Guerard is regarded as one of the founders of what was called in the years 1960 and 1970 the movement "the new kitchen" the forefront of nouvelle cuisine

Extract from The Perfectionist by Rudolph Chelminski published 2005.
What could possibly possess a three-star French chef, a master of his difficult trade in a country that reveres cuisine, to commit suicide in 2003, just after wrapping up the daily lunch service?