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Legislation that has cleared the NSW cabinet could see the state become the first to allow electronic signatures in property and land transactions.
The changes to the property laws are being driven by Finance Minister Victor Dominello and would achieve end-to-end electronic property processing.
Currently, the legislation states that requirements for deeds are to be executed on “paper, parchment or vellum,” which has led to calls to update the legislation for the 21st century.
The government is planning to introduce the amendment to the Conveyancing and Law of Property Act in September and the move should speed up deals.
The move to digitise signatures builds on laws passed last year that digitised a raft of paper processes.
Current electronic transaction services deal with the completion side of property transactions, but under the amendment, vendors could start the whole process electronically rather than at the final bit.
Mr Dominello told the Financial Review that the use of signatures was a win for buyers.
“By introducing e-signatures, we are giving buyers more time to read documents, providing greater security and reducing the time needed to settle a property transaction, meaning a 30-day settlement period is no longer a race against the clock,” the minister said.
The legislation is supported by the big banks due to the savings from the streamlined process, and it also benefits the Treasury as the process of calculating and paying fees like stamp duty would speed up.
The new laws will not make e-signatures mandatory and the government would still allow traditional paper signing as well.
Last year, one-third of property deals were lodged electronically with the Land Registry, and Victoria has been trialling e-signatures on property deals, proving the demand for the legislation.
The news laws are scheduled to be introduced in September and if passed could be in place by mid-2019.
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