When the settlement system stops: outages and what happens next

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Kooky

Builder of Shaka, the payment router that pays every agent their commission on closing date.

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Most Queensland settlements complete within minutes of their booked time and nobody outside the transaction ever thinks about the machinery. Now and then the machinery stops. A bank cannot send a payment file, a signing tool fails, a registry system is offline, and for a few hours settlements that were ready to go cannot go.

It is uncommon, and for the people caught in it, with a removal truck loaded and a lease ending, it is the only thing that matters that day. This guide explains what an outage in the settlement system is and what follows from one. It describes the chain of systems a settlement relies on, sets out what happened in the two most recent interruptions that were publicly reported, explains what the system does with money and documents when a link fails, summarises how Queensland's property law deals with the missed date, and reports what regulators are doing about resilience. It is general information. What a particular buyer or seller is entitled to after a failed settlement depends on their contract and is a matter for their solicitor.

PEXA customer update on the Reserve Bank incident of 27 January 2026; Reserve Bank of Australia statement, 29 January 2026.

A chain with several links

An electronic settlement feels like one event. It is a relay between organisations, each running its own systems.

The Reserve Bank's Bulletin set out the order in March 2021. The network sends the Reserve Bank a batch describing what each bank owes or is owed. If the paying banks have the funds, those funds are reserved. The network then lodges the documents with the land registry, and once the registry acknowledges them, asks the Reserve Bank to move the reserved money.

Every step waits for the one before. That is the strength of the design, because money and title cannot part company. It is also why a fault in any one link holds up the whole sequence.

Demand is not spread evenly, which makes timing matter. The same Bulletin article found that in 2020 about 30 per cent of each day's property settlements fell in the hour between 2:00 pm and 3:00 pm, and that Fridays carried roughly a quarter of the week's volume. A fault at two o'clock on a Friday touches far more transactions than one at nine on a Tuesday.

27 January 2026: the payment files stop

The most serious interruption of recent years did not begin in a conveyancing system at all.

The Reserve Bank's statement of 29 January 2026 says that from about 10:30 am on Tuesday 27 January its payment settlement services were disrupted, so that financial institutions could not exchange the files used for batch payments. The Fast Settlement Service, which handles real-time payments, kept working. File exchange was restored at about 5:20 pm.

PEXA's update to its customers fills in the afternoon from the network's side. The problem arose late in the morning. The Reserve Bank applied a fix in the afternoon. A second issue at the Reserve Bank then occurred in the early evening. The settlement window, which the update says ordinarily closes at 8:05 pm, was extended to 10:45 pm.

The two organisations counted the consequences differently. The Reserve Bank said approximately 500 property transactions could not complete before the deadline. PEXA's update said about 5,000 settlements completed during the extended window and about 900 could not complete that evening. It said the majority of those completed on 28 January and that about 100, mostly in Victoria, settled on 29 January. The two sources may be measuring different things, and this guide reports both without choosing between them.

The Victorian group shows how a second fault can ride on the first. PEXA's update attributes their extra day to a validation problem between two duty-related dates in that state's process. The affected workspaces were rolled back and trust funds were returned to the accounts they came from, so those settlements had to be rebuilt.

One sentence in the update addresses the question buyers ask first. PEXA said that at no point were property transfers lodged without its having received an acknowledgement from the Reserve Bank that funds had been securely reserved. The settlements that failed that night failed safely: nothing was lodged, and no money moved.

16 May 2025: signing fails

An earlier interruption shows a different link giving way. The Adviser reported on 19 May 2025 that on Friday 16 May a failure in a mobile signing application used by PEXA subscribers prevented practitioners from signing documents from 10:30 am, with gradual recovery from 11:50 am and resolution at 1:15 pm. The report describes the effect as widespread in Victoria.

By the operator's estimate, as The Adviser reported it, fewer than 10 per cent of the settlements scheduled in that window were affected. They were delayed or rescheduled, and none was estimated to have been missed.

The Australian Institute of Conveyancers' national body responded in the same report: "Any outage, no matter how brief, can have far-reaching consequences for consumers and conveyancers alike." The president of its Victorian division described the pressure that a mid-morning outage adds to a practitioner's day, as delayed settlements have to be rebooked around lenders' availability and the afternoon cut-off.

The two episodes differ in cause, length and scale. What they share is the knock-on: a settlement that slips from late morning to late afternoon is competing for time with every settlement already booked then.

What the system does when a link fails

A settlement that cannot complete does not stop halfway. The design described by the Reserve Bank allows three outcomes only.

If the funds cannot be reserved, nothing is lodged. The workspace stays ready and the parties wait or rebook.

If the funds are reserved and the lodgement does not go through in time, the reservation is released. The Bulletin says the operator will cancel a settlement if a problem is preventing timely completion. In 2020 the average reservation lasted six and a half minutes and fewer than one in a hundred lasted more than fifteen, so money is not left locked for long.

If the lodgement is acknowledged, the money moves.

There is no state in which the seller's lender has released its mortgage and not been paid, or the buyer has paid and the transfer has not been lodged. The Bulletin describes this as approaching delivery versus payment, the principle that neither side performs before the other.

The day also has an end. PEXA's public description of its exchange says settlement cut-off times vary with the jurisdiction and with the requirements of the financial institutions involved. A settlement delayed past the cut-off cannot complete until the next business day unless, as on 27 January, the window is extended for everyone.

What an outage does cost is time, and time is what Queensland contracts are strict about.

What Queensland law does with the missed date

Under the standard Queensland contract the settlement date is of the essence: a party who cannot settle on the day is, in the ordinary case, in default. An outage would turn blameless parties into defaulters if the law said nothing more. It does say more.

The Property Law Act 2023 contains provisions written for exactly this. Proctor, the Queensland Law Society's journal, described them in June 2023 when the legislation was before Parliament.

Section 79 deals with the land registry. Where the registry's computers are inoperative so that title cannot be verified, the provision allows for a new settlement date to be fixed by notice, three to seven business days ahead.

Section 80 deals with the electronic settlement process more widely. Where computers in any part of that process are inoperative, Proctor's summary is that settlement moves to the next business day after the system is operational again, with the days from 27 to 31 December excluded.

Section 81 deals with adverse events, where a party cannot complete because of an event outside their control. Proctor noted that it mirrors a clause already in the standard contract and extends to cases where a party's solicitor cannot reach the systems needed.

The effect, in outline, is that a settlement prevented by a system failure is postponed without either side being in breach. The detail of how each provision operates, what notice is required and how it interacts with the contract's own extension rights belongs with a solicitor in any live case.

Two limits are worth stating. The provisions respond to systems being inoperative, not to a party being unready. A buyer whose loan documents were late cannot rely on an outage that happened to occur the same afternoon unless it was the outage that prevented settlement. And postponing the date does not undo the practical consequences: the truck, the lease, the second settlement that depended on the first.

When one settlement depends on another

The hardest cases in an outage are linked settlements. A family selling one home and buying another on the same day needs the sale to complete first, because its proceeds fund the purchase. If the sale slips to the next business day, so does the purchase, and so may the purchase their own seller was relying on.

Nothing in the settlement system links these transactions formally. Each is its own workspace. The dependency exists in the parties' finances and in the practitioners' diaries. On 27 January the extended window absorbed most of the day's backlog, by PEXA's count about 5,000 settlements, which is why the number carried over to the next day was a fraction of the whole.

Possession follows settlement. An agent holding keys for a seller cannot release them until the seller's side confirms that settlement has completed, so a buyer whose settlement is carried over waits a day for the keys unless the parties agree on something else between themselves.

What regulators are doing about resilience

Both of the bodies with authority over the chain have acted since January.

The Reserve Bank said in its statement that it had identified the underlying cause of the disruption. PEXA's update said the Reserve Bank was completing a comprehensive review and that the operator's own review would be finalised by the end of February 2026.

The Australian Registrars' National Electronic Conveyancing Council, which regulates the network operators, set out its direction on 31 March 2026. In the statement confirming that its interoperability program would not proceed, it said it would strengthen the existing framework through enhanced oversight of operators, compliance monitoring and enforcement, and improved industry resilience. It also said the states and territories would ask the Commonwealth to engage on regulatory gaps in banking financial settlements, the part of the chain that failed in January and that the registrars do not control.

The council's proposed eighth version of its operating requirements gives that direction specific form. A stakeholder briefing dated 17 June 2026 lists annual business continuity testing, certification to the information security standard ISO 27001 with expanded requirements for incident response, annual independent expert reviews of each operator's resources, monthly reporting on essential recommendations until they are implemented, and new insurance requirements covering cyber incidents and business interruption. Submissions on the draft closed on 17 July 2026.

The main operator has pointed the same way. PEXA's results announcement of 28 August 2026 refers to continuing development of its exchange to improve security and resilience. It published no availability figures.

The single-network question

Outages revive an argument about structure. The Independent Pricing and Regulatory Tribunal's draft report of 3 July 2026 gives PEXA 99 per cent of electronic conveyancing, so a fault in that network reaches nearly every settlement in the country. After the May 2025 interruption a spokesperson for Sympli, the other approved operator, told The Adviser the arrangement was a single point of failure.

The January incident points to a limit on that argument. The fault lay at the Reserve Bank, through which the banks' payments pass whichever network a settlement uses. A second network does not provide a second central bank.

The registrars examined whether to connect the two networks and decided in March 2026 not to proceed for the present, citing cost, complexity and uncertain benefit. Their chosen course is to raise the resilience required of each operator. This guide records the positions and does not judge between them.

What buyers and sellers can take from it

None of this calls for alarm, and none of it can be controlled by the parties to a sale. A few observations follow from the facts above.

Outages have been rare and short. The longest in the public record reviewed here delayed most affected settlements by hours and the last of them by two days.

Money has not been lost in them. The system is built so that a settlement which cannot finish does not start.

The law does not treat a party as a defaulter because a system failed.

Timing has an influence. The Reserve Bank's figures show Friday afternoons carrying the heaviest load, which means the least room to rebook the same day. When a settlement is booked is a choice the parties make in the contract and their practitioners make in the workspace.

And the practical costs of a day's delay fall where they fall. Removal bookings, bridging accommodation and linked transactions are outside both the settlement system and the statute, so they are matters the parties have to plan for themselves.

A settlement outage is a delay, not a loss. The system holds the money and the title together, and when it cannot move both it moves neither.

Kooky, from Shaka

Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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