The state of the e-conveyancing nation

Introduction
Perhaps the most pressing reason is that with the land reform initiatives, the Deeds Office will face an increase in requirement volumes from 6 million land parcels to over 20 million. An increase of 300% - see DeedsWeb.

At its baldest the solution is to "design, build and implement a self-servicing, electronic, secure land registration system wherein documents are created, submitted, signed, and maintained in electronic format, complete with legally binding digital signatures". The problems are too complex and beyond the scope of this article to be detailed in full here. However, by illustrating what has been done in a number of jurisdictions we will reach the inescapable conclusion that such a system is feasible and that the hurdles faced are legal not technical.

What I propose to do here is to summarise what has been done overseas and to hyperlink to relevant web sites, thereby expanding upon and proving my thesis. This article will also serve as a useful framework for my future writing on electronic deeds registration (eDRS).

Canada
Canada is the world leader in electronic registration. In the eighties an alliance between the Ontario ministry of Consumer and Business Services and a private company called Teranet® led to the world's first remote electronic document land registration system being created. For the last 10 years the automated land registry system has meant that sellers and buyers can retrieve and access digital title documents needed for property transfers. Accredited lawyers and their agents create and submit the electronic title transfer documents, which then become the official record.

Central to the success has been the Province of Ontario Land Registration Information System - POLARIS®. Teranet has automated and electronically mapped some 3.2 million properties, while a huge database of some 125 to 150 million imaged documents which correlate to parcel data has been created.

Potential legal hurdles were overcome by the passing of innovative legislation that stipulates that electronic documents that create, transfer or otherwise dispose of an estate or interest in land are not required to be in writing or to be signed. The deed as a paper document effectively disappears and all that is submitted to a registrar is an electronic document authenticated by the digital signature of the presenting conveyancer.

Of interest to us is the fact that many of the checks which would normally have been done by the registrar's staff are either pre-programmed into a rules table on the system or deemed to have complied with the law as a result of the conveyancer's standard searches and checks on behalf of his client.

Ontario is in many respects the leader in the automated registration of title and the following links are instructive: Land title branch, Teranet and Resources from the Law Society of Upper Canada.

New Zealand
New Zealand has introduced a system that is similar to that in operation in Ontario. Called Landonline, it is a project initiated by Land Information New Zealand (LINZ) that has converted millions of title records, title instruments, plans, parcels and geodetic survey marks into an electronic format. Ultimately the entire conveyancing process will be automated, cutting the turnaround of lodgements from the present 10 to 15 days to 24 hours.

The project has been implemented in a phased rollout schedule. Stage One, through which land professionals can conduct remote searching of the Landonline survey and title database from their own PCs via the Internet, is complete. This is similar to what has been achieved in South Africa with Windeed and Aktex. Stage Two, the introduction of remote digital lodgement of survey plans and routine title dealings via a secure system, underwent a successful pilot test in November last year.

It is hoped that within 18 months at least 60 percent of simple transactions - mortgage discharges, transfer of titles and registration of new mortgages - will be done electronically. This system is discussed more fully in the article Landonline in the 11 June GhostDigest.

The Land Transfer Act was significantly amended in 2002 with the Land Transfer (Computer Registers and Electronic Lodgement) Amendment Act 2002 as part of the transition to a fully automated (computerised) system of registration and conveyancing. In a daring leap s5 states: "The Registrar may authorise the registration or deposit of instruments, and the recording of information, in any medium".

United States of America - Florida
Given the size of the USA and the number of jurisdictions it is difficult to give an accurate indication in this article. However, as long ago as July 2000 the first online mortgage application and paperless real estate closing took place in Florida. The transaction was then electronically recorded by the county, title insurance was issued, and images and index data for the deed and mortgage were digitally sealed before being transmitted to the Broward County Records Division through a website portal created especially for electronic transactions. This electronic lodgement is discussed more fully in First paperless property transfer in the 2 April GhostDigest.

Electronic recording was made possible by the new Florida Uniform Electronic Transactions Act (FUETA), which took effect on July 1. Broward County Records Division link.

Scotland
The Registers of Scotland has initiated the Automated Registration of Title to Land (ARTL) project that aims to introduce paper-free registration of title to rights in land. After a successful pilot, the system will be rolled out. This means changing the legislative framework to enable e-registration. It is also proposed that ARTL will only process routine dealings of whole registered interests in land, such as either adding or removing entire entries in the Proprietorship and Charges Sections of the title sheet.

Instead of preparing paper deeds and registration forms, all applications will be completed online. The paper deed will be replaced by a digital deed that will be created within the ARTL system. This process will be completed using the Internet to access the ARTL system and will result in the automatic updating of the Land Register title sheet.

The Law Society of Scotland and the Council of Mortgage Lenders support this initiative, as do the Scottish Executive Justice Department, Ministers and the Scottish Consumers Council. A consultation document and this brochure succinctly illustrate the proposed process.

Australia
Like the USA, the various states in Australia are developing, or have in place, systems of electronic lodgement; that said, there is a lot of interaction between interested parties in the various states. The Land Exchange has initiated an Electronic Conveyancing (EC) project that will enable online processing for conveyancing, settlement and lodgement of land dealings.

The first stage of EC (EC Release 1.0) which comprises transactions of discharge, transfer and mortgage, will be released for pilot testing in April/May 2004. Interestingly the EC will not be mandatory and users will be able to continue with the existing paper-based system.

Over the last few years an EC project team consisting of stakeholders from the financial, legal, conveyancing and property industries have developed an Electronic Conveyancing model.

Generic Legislation - the Transfer of Land (Electronic Transactions) Bill - has been proposed by the EC project team. It is modelled on the concepts underlying the Electronic Transactions Act (Commonwealth) 1999 and the Electronic Transactions Act (Victoria) 2000 and will gather all the legislative requirements together to enable electronic conveyancing. It will not change the law but rather extend it.

An example of state initiatives can be found in The Electronic Land Dealings programme in South Australia which has an Electronic Document Lodgement project. This project aims to pilot the implementation of web-based preparation, lodgement and receipt of documents.

England
I have written at length about the situation of e-conveyancing in England in the following article: Looking at e-conveyancing in England. In many respects the English experience is a good example for South Africa to follow. The legal problems have been largely addressed by the Electronic Communications Act of 2000 (see the article CML response to Electronic Communications Act 2000).

The vast E-Conveyancing Consultation report, is a must-read because over 80% of respondents to it said they could not suggest a better approach to the problems of e-conveyancing. Problems raised and dealt with include widespread fears about the reliability and security of the new system - particularly that of digital signatures and the possible impact on existing IT systems. Many respondents stated that e-conveyancing must integrate with existing casework management systems, e-mail systems and word processing software.

The initiatives taken by Land Registry department have been hugely impressive, and we in South Africa could take a few leaves out of their book. An e-conveyancing Task Force is dedicated to developing an effective electronic system for the buying, selling and registration of land and property in England and Wales.

The programme aims to utilise advances in technology by creating a system that reduces the delay and anxiety that can be experienced in the house buying process. This will be enabled by encouraging open access to chain information and providing a mechanism whereby all payments relating to the transactions in the chain can be paid simultaneously and electronically, with automatic registration on completion.

The Land Registry's first e-conveyancing consultation exercise has given it a broad idea of what is expected and required of e-conveyancing. Further investigation will take place to establish the details and procurement of the proposed system.

South Africa
For a neat exposition of the situation in South Africa, read Electronic Land Registration: Options from a legal perspective Part 1, and Part 2 by Gustav Radloff.

In analysing the potential legal options for the implementation of an electronic land registration system, he writes that the challenge is to have a speedier and more cost-effective land delivery system without compromising the accuracy and security of title now enjoyed by the South African public. He believes that a post paper land registration system will be even more dependent than it is now on the continued integrity, qualification and training of the deeds office examiners and conveyancers in private practice.

Conclusion
South Africa is definitely moving towards an electronic deeds registration system. Many of the components are in place. What is needed is a concerted, clearly articulated effort between the relevant players. The government with regards to legislation - the Electronic Communications and Transactions Act 25 of 2002 is a case in point, local software developers, the banks, attorneys and the Deeds Office.