NSW moves to 100% electronic lodgments and the cancellation of paper Certificates of Title

/ / Law, Property

The Office of Registrar General NSW (ORG) has announced that from 11 October 2021, the land titles system in NSW will transition away from paper-based processes to 100% “e-conveyancing”.

 

The Real Property Amendment (Certificates of Title) Act 2021 makes the necessary changes to legislation to make way for:

  • the cancellation of Certificates of Title (CTs);
  • 100% electronic lodgement of land transactions; and
  • Abolition of the requirement for the consent of the party with Control of Right to Deal (commonly referred to as CoRD Consent)

Consequently, from 11 October 2021 there will be five significant changes to conveyancing:

  • the cancellation of CTs and the CoRD framework
  • all land dealings must be lodged electronically
  • all conveyancing transactions must be processed electronically (subject to any dealings that remain “out of scope”)
  • as all dealings must be lodged electronically through and electronic lodgment network operator (or ELNO), private persons will not be able to prepare, sign or lodge documents and must use a conveyancer or solicitor; and
  • lodgement of any dealing to be confirmed by Information Notices rather than the issue of a new paper CT

WHAT THIS MEANS FOR LANDOWNERS

There are five main changes for landowners:

  1. Those registered proprietors who pay off their mortgage will no longer receive a CT after the mortgage is removed from the title.
  2. A purchaser of property without a mortgage (ie a “cash-buyer”) will not receive a CT.
  3. When a plan of subdivision is registered, and new parcels of land are created, CTs will no longer be issued for those parcels of land.
  4. Private individuals will no longer be able to prepare, sign or lodge their own documents and must retain the services of a conveyancer or solicitor to prepare, sign and lodge all documents with the NSW Land Registry.
  5. As from the 11 October 2021 a Certificate of Title will no longer be a legal document.

Landowners who hold a paper CT for their property do not have to do anything before or after 11 October 2021. Any CTs held by landowners will have no legal application and will no longer be evidence of ownership.  The landowner is entitled to deal with the paper Certificate of Title as they wish, should they wish to frame it, file it, or destroy it.

Owners of unencumbered land, who have left or stored their CT with a third party, may wish to contact that third party to request the return of the CT or authorise its destruction. From 11 October 2021 there will no longer be a remedy under the Real Property Act 1900 to retrieve a CT back from others as it has no legal effect.

PROTECTIONS IN PLACE WHERE THERE IS NO CT

The Office of the Registrar General (ORG) advises:

The Torrens Register is the single source of truth as to a person’s interest or estate in land. All documents to be registered on the Torrens Register must be lodged by a conveyancer, solicitor or bank, who must verify the identity of their client and establish that they have the right to deal with the land.”

Introduction of an Information Notice

Following the registration of a document, an Information Notice will be issued.

Details that will be on an Information Notice include:

  • The folio identifier,
  • the dealing(s) that were registered including their registration number(s),
  • the subscriber’s (conveyancer or solicitor) reference and the date of registration.

The ORG advises:

Information Notices will NOT include the names of the Registered Proprietors and is NOT a definitive statement of the Register.  A  title search of the Register (which can be obtained on payment of a fee) will be necessary to provide the most accurate and up to date title information regarding the property.” (emphasis added).

Consequently, it is strongly advised that conveyancers and solicitors obtain an updated search of the Register to ensure that the Transfer (or other dealing), has correctly recorded the name of the new owner(s) or the new interest on the Register.

For further information on the Abolition of Certificates of Title please see:  https://www.registrargeneral.nsw.gov.au/property-and-conveyancing/eConveyancing/abolition-of-certificates-of-title

OTHER IMPORTANT ISSUES PURCHASERS, OWNERS, CONVEYANCERS & SOLICITORS NEED TO CONSIDER IN ECONVEYANCING

Priority Notice

A Priority Notice is a notification of dealing or dealings with land intended to be placed on the Register. If you have agreed to buy a property and have exchanged a Contract, a Priority Notice will notify your interest on the Register, until settlement (provided settlement occurs within 60 days).

Priority Notices protect buyers during the transaction by providing assurance that their interest is known to others from the time the Notice is lodged through to settlement.

A Priority Notice provides protection for 60 days and can be extended for an additional 30 day period. This covers the majority of settlement periods and is a simple low cost, time-limited alternative to lodging a caveat (see below).

A Priority Notice will temporarily prevent new legal interests (subject to some exceptions) in the land being registered for the duration of the Priority Notice.

Benefits of Priority Notices:

  • Increased level of protection to property buyers during the settlement process.
  • Simpler and cheaper alternative to a caveat.
  • A Priority Notice can reduce risks associated with a settlement of 90 days or less at minimal cost.
  • Lodging is quick and easy, as you only need to submit the Transferee’s name and title details when registering online.

Conveyancers and solicitors should advise their purchaser clients of the benefits of a Priority Notice and whether it best protects the interest in the land being purchased.

For further information on Priority Notices see:

https://www.nswlrs.com.au/Titles-Dealings/Title-Information/Buying-Selling-Property-in-NSW/Priority-Notice

 

PURCHASER CAVEAT

A Caveat is a statutory injunction that prevents the registration of most dealings and plans on a title. A Caveat on a land title operates as a warning to others by noting a person or organisation’s interest in land or property.

Only those with an eligible interest in the land can record a Caveat on title. If you lodge a Caveat without ‘reasonable cause’, you may be liable to pay compensation to any person who suffers a pecuniary loss as a result.[1] In addition, a conveyancer or solicitor who fails to take reasonable steps to inform themselves of the information and evidence supporting the application, may also be subject to disciplinary action.

The party that records a Caveat on title is known as the “Caveator”.

A Purchaser, with an exchanged Contract, has an equitable or eligible interest in the land being purchased and the Purchaser’s Conveyancer or solicitor may lodge a “Purchasers Caveat”.

Once the Caveat is recorded on the Register, no new dealings (interests) can be registered, until the Caveat is withdrawn or Caveators Consent to the registration of a dealing is provided.

Once the purchaser’s transfer has been registered, the “Purchaser’s Caveat” will automatically lapse and be removed from the Register.

Benefits offered by a Purchaser’s Caveat

  • Increased protection for a purchaser during long settlements by recording their interest in the property on title before it is transferred to them.
  • Prohibits the recording in the Register of any dealing other than a plan affecting the estate or interest claimed by the Caveator and
  • Prohibits the recording in the Register of a Writ affecting the estate or interest claimed by the Caveator.

Conveyancers and solicitors need to advise their purchaser clients of the benefits of a “Purchasers Caveat” and whether it best protects their interest in the land being purchased.

For additional Information on Purchasers Caveat refer to

https://www.nswlrs.com.au/Titles-Dealings/Title-Information/Buying-Selling-Property-in-NSW/Caveat

 

OWNER’S CAVEAT

An owner’s home and investment property are likely their largest and most valuable assets. Taking all steps, especially in the digital world of e-conveyancing, to protect them by minimising the risk of fraudulent activity on property is more important than ever. Remember, there are no more paper CTs or CoRDs, and an owner need not to have signed a document or dealing, for that document or dealing to be registered on their title!

In e-conveyancing, conveyancers and solicitors have an electronic signature and are the [2]Guardians of the Gate” of the Register.  And whilst there are Rules governing the application of electronic signatures, there is also online fraud and identity theft, and property assets could fall victim to these activities. If owners have concerns that a fraudster could steal their identity and deal inappropriately with their property, they should consider an additional protection which can be put in place to minimise this risk, by registering an Owners Caveat on the title to their property.  Consequently, as a Caveator, the owner’s consent will need to be obtained, or the Caveat withdrawn, before a dealing can be registered over their title.  An owner of unencumbered land may lodge an “Owner’s Caveat” over their own land or estate when it is not already protected by other dealings (such as a mortgage).

Benefits offered by an Owner’s Caveat

  • Prevent the registration of an incoming interest or dealing by other parties.
  • Protect an interest under a Contract for Sale (Purchaser’s Caveat)
  • Requires the owner’s consent or withdrawal of the Caveat before a dealing can be registered over an owner’s title.

Conveyancers and solicitors need to advise their purchaser clients of the benefits of an “Owners Caveat” and whether it best protects the interest in the land being purchased.

For further information on the Purchasers Caveats  please refer to https://www.nswlrs.com.au/getattachment/d24ee8f1-0985-45ab-a1e6-8ceb54e263f6/Caveat%20Consumer%20Brochure

Conclusion

From the 11 October 2021 “e-conveyancing” will be fully mandated for all property transactions in NSW. There are new rules and complex procedures that must be understood by persons dealing with interests in land adhered to by Conveyancers and solicitors. It is important that Conveyancers and solicitors appropriately advise their clients of the new conveyancing requirements, obligations and risks and that Purchasers, Vendors and persons dealing with an interest in land, seek professional and legal advice from their Conveyancer or solicitor.

 

Dale Turner

[1] Guirgis v JEA Developments Pty Ltd [2019] NSWSC 164

[2] Guirgis v JEA Developments Pty Ltd [2019] NSWSC 164