Property settlements were not always as simple as they are today – according to Christina Berlis of MV Law it was “mayhem”. Photo: MV Law.
You’d be forgiven for raising an eyebrow at Christina Berlis’ description of how property purchases were settled in Canberra just two years ago.
The MV Law property development manager paints a picture of utter chaos – and it’s a true story.
“There’s one room in the city, the Settlements Room, where all the Territory’s properties are settled. Picture all the representatives from all the banks and law firms in that room, literally swapping physical property titles for cheques to transfer properties,” she says.
“It’s loud, it’s frantic, there are million-dollar cheques passing hands – it’s mayhem.”
For solicitors or conveyancers who specialise in project property settlements such as Christina, there’s the extra challenge of settling properties in bulk. It’s not uncommon to have projects of anywhere from 50 to 500 units with the same settlement due date.
Thankfully, things took a quantum leap with the introduction of PEXA and PEXA Projects, a Property Exchange Australia platform that connects financial institutions, lawyers and conveyancers to enable online property transactions in bulk.
It was a game-changer for Christina, who says bulk property settlement in particular has come a long way compared to 12 years ago when she started.
“There’s still a lot of preparation work required to ensure those settlements go off without a hitch, but prior to PEXA any number of things could up-end a settlement,” she says.
Digitisation has revolutionised ACT property settlement. Photo: iStock.
“The cut-off for cheque directions to the bank to ensure settlement could proceed that afternoon used to be 10 am, a minute later and the settlement would be pushed to the next day. With the introduction of PEXA, settlements can occur up to 4:30 pm every day in the ACT, and that’s had a major impact on the number of properties we can settle in a day.”
She’s not exaggerating. Prior to this form of digital settlement, Christina says she’d be lucky to complete 150 settlements in a day. Earlier this year, she smashed that record with the bulk settlement of stage one of Geocon’s WOVA precinct.
With 825 units across two stages including a hotel, WOVA is the largest units plan to date in the ACT. MV Law was able to settle more than 300 of stage one’s 620 units in one day.
The leap in technology has not just impacted the speed and volume of settlements. The elimination of certain manual processes means less risk of human error as well.
“I’ve seen $2 million settlements fall over because of a typo on the cheques,” Christina says.
“But it wasn’t all human error. Banks might sometimes just say ‘Sorry, we have no more capacity to print any more cheques, come back tomorrow’. By removing that cumbersome process of writing cheques, cashing cheques and then waiting for them to clear, we not only have more capacity, we have more transparency and certainty.
“It’s all had a big knock-on effect for our clients, because not only are they clearing more settlements in one day, with the automatic electronic disbursement of funds, the transfers are hitting their accounts the same day, rather than having to wait for that cheque to be cashed and cleared.”
Sellers also no longer rely on third parties to inform them when a settlement has been successfully finalised – the platform can be set up by conveyancers to send automatic notifications.
Christina says this has empowered sellers to more quickly get to the good bit.
“When we talk about housing affordability, we’re finding the majority of first home buyers trying to break into the market are buying in multi-dwelling developments, specifically off the plan,” she says.
“Now that sellers receive prompt notification of their settlements, it allows them to welcome their buyers into their homes faster.”
For more information, contact MV Law.
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