What does settlement mean and what happens on settlement day?
Settlement is the conclusion of a property conveyancing transaction.
At settlement, the ownership of a property changes into the purchaser's (or transferee's) name. This is the culmination of the conveyancing process. When settlement is completed, on the settlement date, the purchase, sale or transfer of the property ownership's is legally completed.
For about the last seven years, all property settlements in Victoria have occurred electronically, via the PEXA online conveyancing platform. The relevant banks and lawyers/conveyancers, the State Revenue Office, the Land Titles Office and the Reserve Bank of Australia (which is the payment system facilitator) all participate in an electronic PEXA workspace, where the settlement process is completed. There are no more paper Transfers of Land, paper titles and bank cheques – everything is electronic and settlement occurs digitally, via the PEXA platform (so there's no more gathering in a room in the city, to hand over bank cheques in exchange for paperwork!). And there's no more manually ringing a bank to book in settlement. When the PEXA workspace is set up (usually about a month before settlement day), the relevant bank is invited to join the workspace, and once the bank is ready to book settlement, they simply click in the PEXA system to accept the proposed settlement date and time.
As long as your savings money is sitting in the relevant bank account, ready to be electronically deducted during the settlement process, there is nothing you need to do on settlement day (except pick up keys if you're the new owner). But you don't even need to be in the country.
The most common settlement start time is 2:00pm, due to the banks’ funding requirements, and it usually takes about 30-45 minutes to complete. Our office will send you a WhatsApp message when it’s all done. You can then arrange to collect the keys from the real estate agency (or the vendor directly, if there is no agent involved). And you don't have to collect the keys yourself, you can authorise someone else to do that for you, and it doesn't have to be on the same day. So on settlement day, you can be sitting on a beach, anywhere in the world, living your best life, while we take care of everything for you!
After settlement has been completed, a new title search (Register Search Statement) can be ordered to confirm the ownership transfer. And as there are no more paper title certificates, the new electronic title is controlled by the new owner's mortgagee (as security for their loan), or the new owner's lawyer or conveyancer if there was no new mortgage involved. Electronic titles are far safer and more secure than paper titles - they can't be stolen, lost, burnt in a house fire, get coffee spilled on them, etc. And if ever a title controlled by our office is needed, we will quickly transfer control of it (usually to a new mortgagee) via a new PEXA workspace, at no cost.
Note: the above is general information and should not be considered as legal advice.
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