Why E-Conveyancing Innovation Must Be Driven From the Centre
I doubt there was a conveyancer in England, Wales or Northern Ireland who wasn’t counting down until the 1st July, especially during those frantic final weeks of the stamp duty holiday. The industry was pushed to breaking point with 131,000 transactions above £250,000 yet to complete at the beginning of June.
The conveyancing logjam created by the Chancellor’s giveaway shows just how antiquated certain parts of the conveyancing process still are. Not only does this frustrate buyers and sellers with needless delays, it also adds to the toll placed on conveyancers, which can lead to burnout and skilled professionals leaving the industry altogether.
So as we catch our collective breath while transactions slowly return to more manageable levels, we should focus our attention on what needs to be done to enable end-to-end e-conveyancing.
The initial reaction of many when faced with this question is to say that conveyancing firms need to modernise and invest more in technology. And while it’s true that there are still a few legacy firms out there that continue to post paper documents and hold up the workflow of others, the majority have made smart investments to optimize their case management and communication.
However, no matter how good a firm’s CRM is, or how smart their automations are, it’s the factors beyond the control of an individual firm that stand in the way of end-to-end e-conveyancing. It’s for this reason innovation must first come from the centre, before firms can finally deliver true e-conveyancing.
Building a Central Exchange
Data flows and information exchanges within conveyancing are extremely siloed. Much of the time, one firm’s closed system sends or receives information to or from another firm’s closed system. And while the Land Registry has a centralised database of property titles, conveyancers only interact with it at certain points during the process.
This closed system-to-closed system approach is one of the weakest links in the conveyancing chain. It creates issues with interoperability of data between systems and can cause even longer delays if a firm is still sending documents via fax or post.
The cleanest solution to this problem is to create a central point of convergence that is used by all parties, with clearly defined data standards. Each firm’s CRM would push and pull data into the exchange using the agreed upon data standards, enabling seamless and real time data flows for all parties involved in a title transfer.
I’m basing my faith in this idea on more than just theory. It’s efficacy has been proven in Australia with PEXA, the online property exchange network, through which all data exchanges between conveyancers and other parties are funnelled during the title transfer process.
Developing E-Conveyancing Legislation
In order for a central exchange to become a reality and for all title exchanges to be processed through it, appropriate legislation is essential. Without legislation, trying to achieve critical mass with competing exchanges that are voluntary to use would be extremely difficult, and waste precious time in the process.
To this end, the government needs to work with industry to develop a framework for national e-conveyancing standards. This framework would govern the operating requirements for all organizations involved with e-conveyancing, ensuring unified data standards and processes.
Once this framework is in place, prop-tech firms would then have the necessary foundations to build the next generation of e-conveyancing software for conveyancing firms.
Australia is once again a great case study in how to achieve this. The government worked with industry to establish the Australian Registrars’ National Electronic Conveyancing Council or ARNECC. The council then paved the way for the development of the Electronic Conveyancing National Law, which governs the e-conveyancing process for all actors involved in title exchanges.
Establishing a Government Agency, Regulator or Body
Who would be responsible for ensuring compliance with e-conveyancing regulation and operating standards would also need to be determined. This could be led by industry via the CLC, working in partnership with the government. Or if the government were to drive this, then the Land Registry could be given an expanded remit and powers to manage this.
In terms of the central exchange, we should keep an open mind as to whether this should fall within the ownership and control of the public or private sector. PEXA is operated by a private company that was setup specifically to deliver the government’s objective of e-conveyancing in Australia, and has proved extremely successful since launch.
A similar model could be applied in the UK, where the government sets e-conveyancing legislation and empowers an agency or body to administer the framework that’s established. Private companies are then free to develop solutions that deliver a central exchange for title transfers.
The operating requirements across each of these exchanges would be the same, as defined by legislation. This would enable interoperability between exchanges, meaning conveyancers could easily move from one exchange to another, or that title transfers involving conveyancing firms using different exchanges wouldn’t be unnecessarily held up.
While setting the framework that will deliver true end-to-end e-conveyancing relies on the legislative power of the government, it shouldn’t necessarily fall on the executive power of the government to implement this. The government should focus on creating the conditions needed to facilitate private sector innovation, while removing roadblocks that stand in the way of this.
And when it comes to the operating requirements and national standards for e-conveyancing that an act of legislation would create, these must be developed in detailed consultation with industry. Only then will we have the conditions in place to transform the industry and ensure conveyancing logjams become a distant memory.