The Case for Land Registry Consolidation
In part four of the Forming our Future Series, we explore the natural evolution of e-conveyancing to a national commercial model for Australian land registries.
Given the reform agenda, driven by government, through PEXA to deliver a national electronic conveyancing solution, the next logical step, as was the case with CHESS and the ASX, would be a commercial model for managing the registry of ownership associated with property, and changes to those titles based on the transactions supported by the exchange (i.e. a land registry operated in similar fashion to a share registry).
This is a natural evolution for e-conveyancing, towards a broader integrated ecosystem, as we saw with Computershare taking on the responsibility for managing a share registry on behalf of listed companies on the ASX. The opportunity and need is further compounded by:
Lodge the land title dealing documents and related instruments needed to register changes in property ownership and interests.
- Allow the different and accredited parties involved in the transaction to view and complete the documents to conclude the property exchange or transaction.
- Allow for the electronic settlement of all financial transactions at a nominated date including settlement monies, duties, taxes and any disbursements.
- Lodge electronically land title instruments for registration with the relevant state or territory land registry for electronic processing.
The impediments to further reform of the land transaction process:
- Options to reform and Strengthening Australia’s Foreign Investment Framework with national insight to transactions1.
- Taxation reform pertaining to stamp duty, land tax and housing affordability.
Add to this the inefficiencies of running separate registries with dedicated infrastructure per jurisdiction and the pressures on government spending, only amplifies the case for consolidation of land registry functions. This consolidation is likely to be commercial in nature and separate from PEXA, as was the case with Computershare, or offered as separate but associated service from PEXA (e.g. the ASX sub register).
The business case for a commercial consolidation of land registries, integrated to PEXA, as a multitenant SaaS (software as a service offering) is compelling. In terms of an addressable market, there are 35 Torrens title jurisdictions in the world and a number of significant jurisdictions which are seeking to reform their land titling systems and potentially adopt Torrens, or Torrens like, titling systems (within Australia alone there are 8 land registries).
As with the interest in individual land registries also ready being shown by the private sector in relation to different options for private operation of land registries (outsourcing, concession and privatization) on behalf of state government, a National land registry would attract significant interest from the private sector and a multi-tenanted SaaS offering addresses the barrier of state sovereignty.
The natural evolution for the real property market is to embrace the digital disruption occurring in all exchange traded sectors and move online to realise ground-breaking benefits for all stakeholders in the process.