News stories have headlined recently of a young Brisbane couple who lost their life savings when they were unable to complete settlement on a new home by the contract settlement date. Despite the delay being caused by their financier, the error effectively forfeited the couples $75,000 deposit.
Another Queensland buyer lost her $29,000 deposit and dream home because of a 13-minute delay which meant the vendor could cancel the contract.
Although these situations are extreme, having been in the settlement industry for close to 10 years, I have seen first-hand the last-minute craziness and contract termination “close calls” that occurred most days.
Recent changes to the REIQ Residential Contract, released on January 20, are a welcome relief for Queensland home buyers and sellers, meaning these situations can hopefully become a thing of the past. Among the changes was a clause to allow either party to request and be granted an extension for settlement delays.
Andrew Francey, Chief Operating Officer from Own It Conveyancing said, “The consequences to each party for failure to settle were harsh in the original version and often the issues were outside of the parties’ control, so this is a welcome change.”
Queensland contracts at 4-5 weeks are shorter than other states who typically have 6–8-week settlement timelines. Whilst a benefit for buyers and sellers, it puts pressure on the industry to move faster, with banks often scrambling to work through the lending process, prepare and have loan and mortgage documents executed in time for settlement.
Mr Francey said, “Technology has helped with transparency of deadlines, though clear communication with clients is key, to ensure they are aware of their obligations and all parties are aware of associated deadlines. The industry is typically slow to meet the needs of today’s 24/7 customer expectations.”
He suggested that consumers overall, want to communicate, and settle electronically. The recent uptake of electronic settlements and electronic signing of documents for example, has demonstrated they are more than willing to adopt technology.
Mr Francey also suggested that further adoption of technology is needed in Queensland, such as electronic contracts, signing of documents and electronic title office documents, but key will be ensuring that doesn’t increase risk.
Platforms like Securexchange are helping to win the fight. Securexchange is a complimentary workspace that allows verified individuals to securely share confidential information (bank account details) between parties, in addition to electronically signing, exchanging, and finalising contracts.
Lee Bailie, Head of Securexchange, said “it helps to bridge the gap between the convenience customers demand, and the security required to protect financial transactions from fraud. The reality is cyber criminals are becoming more sophisticated and any professional should now be thinking about how they can protect their clients and offer a simple secure solution – Securexchange does this.”
One thing is certain, technology will continue to play a big part in gaining efficiencies and convenience for clients. The opportunities within the property, legal, conveyancing and financial industries are rife, particularly when there are both high stakes and high risks involved for all parties.
