lift and replace encumbrances in south australia matthew kelly · you can now complete the details...

1 © Property Exchange Australia Limited (PEXA) 2019.

Lift and Replace Encumbrances in South Australia

Matthew Kelly PEXA Direct Specialist – South Australia


1. In South Australia, we have a common practise of lifting and replacing encumbrance documents at

settlement. This is a South Australian specific procedure, and not something that is common place in other states.

2. In a paper settlement, it would be standard practise for the practitioners completing the

conveyance to book the practitioner who is completing the lift and replace encumbrance to attend the settlement, for the purposes of handing over their certified documents in exchange for their

fees.

3. In a PEXA settlement, it is very similar. We invite the practitioner to join the workspace, to attend the settlement, for them to load their documents and enter their fees to be paid at settlement.

4. This webinar does not deal with whether a lift and replace is required for your settlement, as this

varies due to a large number of things.


Creating the workspace

1. You create your workspace as usual. It makes no difference if the workspace is created by the Proprietor on Title or the Incoming Proprietor. Pursuant to PEXA Transfer Guideline 1, the

workspace can be opened by the Proprietor on Title, Incoming Proprietor or the Incoming Mortgagee. If a workspace already exists, and pop-up will appear to notify you and you will have

the option to join the workspace.

2. Once you are at the stage of sending your invitations, invite the practitioner who is completing the lift and replace as “Encumbrancee on Title”


If the Encumbrancee is staying the same:

If the Encumbrancee does not change from the lift and replace documents, the practitioner

completing the process can complete the whole transaction as “Encumbrancee on Title”. This is because PEXA has designed the transaction to be completed without creating a new party.

If the Encumbrancee on the new encumbrance will be different:

If the new encumbrance has a different Encumbrancee to the encumbrance being removed, then

the practitioner completing the lift and replace will need to create a new role of incoming encumbrancee, allowing them to create the new party in the participants screen, and then select

this party on the encumbrance document.

To create the new role: you can complete this from the “Workspace Settings” screen:


For the practitioner completing the lift and replace, you would add the role of incoming encumbrancee the same way as adding any other role, as follows:-

i. Go to the Workspace settings on the top left of the screenii. Edit the role settings

iii. Add the role from the dropdown menuiv. Click the green “add role” button, then the blue “save” button.

The difference between these two scenarios is that the practitioner completing the lift and replace will either have either 1 role of encumbrancee on title, or 2 roles, encumbrancee on title and incoming encumbrancee.


• Once the roles are added to the workspace, the practitioner completing the

lift and replace encumbrance competes the workspace like any other, by working down the blue menu on the left hand side.

• Land Titles –check that the title is correct and that you have the correct encumbrance registered on the title.

• Participants –confirm representation of your clients. The encumbrancee on title

should be an unrepresented party, so you can edit and represent them.If you have a different new encumbrancee, you can switch to the

incoming encumbrancee role, and create the new party. • Documents –

we can now create the withdrawal of encumbrance, and new encumbrance documents. (shown on the next slides)

• Files –For uploading and then attaching covenants to the encumbrance

• Settlement –Confirming lodgement, PEXA and professional fees.


Creating the Discharge of Encumbrance

To create the withdrawal of caveat:

• Click Create Document• Confirm the details of the encumbrance that is being discharged:


Next, confirm your client’s name and address, select which operative words apply then hit save.


We can now create the new encumbrance.

If you are creating both the lift and replace documents from the Same role, you can now go straight in to preparing the newEncumbrance document now:

If you are completing the lift and replace with 2 roles, you cannow switch roles to the Incoming Encumbrancee role, and thencreate the Encumbrance document. The switch button ison the top right hand side of the screen:

Note: If you have to prepare the new encumbrance for a different

Encumbrancee, you will need to ensure that you have created this partyIn the participants screen

first.


Creation of Encumbrance Document

Confirm the title details:

And your clients name and address for the Encumbrancer. This will bring through the details from the title, or

what their representative has entered for them:


Now you can compete the details for

the Encumbrancee. This should all be already completed from the participants screen.

This warning is just here to remind you that if you cannotSelect your client, you have to go back and create them first

In the participants screen.


You can now complete the Details of Rent Charge, and Terms and

Conditions.

There are three ways that you can complete the terms and

conditions.

1. Prior lodgement: You can lodge them with the land registry as a memorandum of common provisions, to receive your

registration number. This is the number that you would put in the “Document Reference” box. If you do not have pre-lodged

terms and conditions, leave this box empty. 2. By adding freeform text: You can click the freeform text

option, then add text.3. Uploading the covenants: This is the most common option.

Click the “Upload Attachment” option, the “Freeform Text” option automatically selects, and the words “Refer to

Covenants” automatically populates. The uploaded covenants will then be page 2 and so on, of the final registered document.


If you are uploading your attachment, you will now get this warning, reminding you that although the

document has been completed, it is still awaiting the attachment.

To upload a covenant file, navigate to the files screen, select to upload a file and browse your computer for the

PDF of the covenants. When selecting the File DescriptionBe sure to select the covenants option, near the bottom,

under “Land Registry Attachment Files”

Choosing this file type ensures that the upload will bereadable by the LTO.

You also have the option of choosing which workspace

Participants will be able to view the upload.


After uploading the document, the final thing to remember is to attach the upload to the document.

If you forget this step, the document will remind you that it is still awaiting the attachment.

This step is required because there may different uploads

which are attachments to different documents (Probate etc)and for lodgement we need to know which attachment

belongs to which document.


Financials when completing the lift and replace encumbrance.

Now that we have the documents prepared,

And the attachments attached, we can complete our financials.

The first thing to check is that the

documents in the document screen have passed a lodgement verification, like this

picture:

If a document (i.e. the Transfer or Mortgage) is still in preparation, the documents will wait

for these to be prepared so that all of the documents can go off for verification

together. So you may be waiting for this tosee the lodgement fees etc.

If the verification is successful, the

lodgement and PEXA fees will be populated in to the financial settlement schedule.


Regardless of whether the lodgement and PEXA fees have populated, the practitioner completing the lift

and replace can enter their professional fees.

Note that these roles just see “Destinations” rather than a breakdown of the Vendor Destination Lines and Purchaser Destination Lines.

Therefore they can just enter both destinations for their professional fees, one for the Vendor and one for

the Purchaser.


If we switch over and look at this

from the Proprietor on Title’sperspective, you can see that we

can see the same information, but split between Vendor and Purchaser

destinations.

Either party can shift payments between the Vendor or Purchaser,

so you can just shift over professional fees as applicable.


The practitioner completing the lift and replace is now finished entering all of the required information and

can sign off.

Now that everything is available to sign. (I.E. The DE, the E and the Financial Settlement Schedule), you can navigate to the signing screen.

The practitioner completing the lift and replace is now finished!!

Remember: If you have completed everything in the Encumbrancee on Title role, you will be able to sign everything together. If you have a role for each the Encumbrancee on Title and the Incoming

Encumbrancee, you will need to sign off the documents and Financials in each role.


Complexities surrounding splitting fees for Lift and Replace Encumbrances

The Practitioners acting on behalf of the Vendor and Purchaser now have to balance their figures to get

ready for settlement.

Common practise in SA, is that the Vendor pays for the registration fee for the DE, the PEXA fee for the DE and receives an invoice from the practitioner completing the lift and replace. Similarly, the Purchaser

pays for the registration fee for the E, the PEXA fee for the E and also receives an invoice from the practitioner completing the lift and replace.

If both of the DE and the E were created in one role, the PEXA fee for both documents will be combined

in to one line item in the destinations. If they are not, that is more simple and you can just assign one each to either party.

The next slide deals with the scenario for when the PEXA fee for each side is together in 1 line item.


Because the lodgement fees and PEXA fees (in some cases) are lumped together:• Vendor needs to allow

adjust their figures for one Registration fee ($170.00 FY 20) to be paid at settlement.

• If the PEXA fees are sitting together under the Vendor’s destination lines, then the purchaser needs to adjust their figures to allow one that half of those fees, and sufficient funds are provided to the workspace as per the client’s statement.

One half of this fee is to

be paid by the Vendor, one half by the

Purchaser

One document worth

of registration fees here in the lodgement

fees is to be paid by the Vendor

Therefore: The totals for each the Vendor and Purchaser will be slightly out as each party is giving the other a credit.


Once the registration fees and PEXA fees have been correctly allocated, and the remainder of the

payment directions have been adjusted accordingly (and all payment directions have been completed) both can sign off.

Always ensure that you are giving and receiving the right amount of money and that you are

comfortable with all of the figures before certifying the Financial Settlement Schedule.

When signing, you will note that the practitioner for the Purchaser is also prompted to certify the newencumbrance on behalf of their client. This document is dual certified by the Incoming Proprietor and

Encumbrancee.

All of the information provided in this presentation is intended to be a guide to help you to load lift and replace encumbrances in most common cases. As with all aspects of conveyancing, there are many

different scenarios and every file is different. We therefore cannot guarantee that any rules which we have provided herein will fit for each workspace.


Thank you