Some big changes are happening in the Real Estate world. It’s been a 10-year journey, but from 11 October we will enter the world of 100% eConveyancing in NSW.

 

What is eConveyancing?

Elec­tron­ic con­veyanc­ing (eCon­veyanc­ing) is an effi­cient, accu­rate, and secure way of con­duct­ing the set­tle­ment and lodge­ment stages of a con­veyanc­ing trans­ac­tion. It replaces many of the paper and man­u­al process­es tra­di­tion­al­ly involved in prop­er­ty trans­ac­tions.

eCon­veyanc­ing allows lawyers, con­veyancers, and finan­cial insti­tu­tions to inter­act and trans­act togeth­er online. With­in the dig­i­tal envi­ron­ment, infor­ma­tion can auto­mat­i­cal­ly feed in from the orig­i­nal source and pop­u­late all doc­u­men­ta­tion while the sys­tem cross-checks that infor­ma­tion. Doc­u­ments are cre­at­ed, signed, and lodged with­in the online envi­ron­ment, and par­ties also com­plete all nec­es­sary steps to set­tle the trans­ac­tion with­in that online envi­ron­ment.

eCon­veyanc­ing is part of the NSW Government’s com­mit­ment to lead­ing dig­i­tal inno­va­tion. The move to dig­i­tal has the sup­port of the prop­er­ty, legal and finan­cial indus­tries and is in line with the com­mit­ment by the Coun­cil of Aus­tralian Gov­ern­ments (COAG) to the devel­op­ment of a nation­al elec­tron­ic con­veyanc­ing sys­tem.

What is 100% eConveyancing?

On 11 Octo­ber 2021, new changes to the land titles sys­tem in NSW will be intro­duced that will tran­si­tion NSW away from paper-based process­es.

The Real Prop­er­ty Amend­ment (Cer­tifi­cates of Title) Act 2021 makes sev­er­al changes to leg­is­la­tion, impor­tant­ly allow­ing for the can­cel­la­tion of Cer­tifi­cates of Title (CTs) and pro­gress­ing NSW to 100% elec­tron­ic lodge­ment of land trans­ac­tions.

There are two sig­nif­i­cant changes from 11 Octo­ber 2021:

  1. the can­cel­la­tion of CTs and the con­trol of the right to deal (CoRD) frame­work; and
  2. all land deal­ings must be lodged elec­tron­i­cal­ly. This is referred to as ‘100% eCon­veyanc­ing’.

 

When does 100% eConveyancing commence?

Mon­day, 11 Octo­ber 2021

 

What is meant by the notion of abolishing Certificates of Title?

Exist­ing CTs will be can­celled and CTs will no longer be issued. Exist­ing CTs can­not be required to be pro­duced to have a deal­ing or plan lodged for reg­is­tra­tion.

Sim­i­lar­ly, Autho­rised Deposit-Tak­ing Insti­tu­tions, such as banks, will no longer be issued with the con­trol of the right to deal (CoRD), which is the elec­tron­ic equiv­a­lent of a CT.

The Tor­rens Title Reg­is­ter has always been and will con­tin­ue to be the sin­gle source of truth as to the own­er­ship of a person’s home. The Tor­rens Title Reg­is­ter is secure­ly stored and backed up by both NSW Land Reg­istry Ser­vices and the Office of the Reg­is­trar Gen­er­al.

 

How do I show that I own my property?

A title search of the NSW Land Reg­istry togeth­er with ID to con­firm you are the same per­son as the reg­is­tered pro­pri­etor shown on the Land Reg­is­ter at LRS.

Also, it’s rec­om­mend­ed that a Rate Notice also be pro­vid­ed as evi­dence.

 

What is the single source of truth for interest in or ownership of land in NSW?

The Tor­rens Reg­is­ter is the sin­gle source of truth as to a person’s inter­est or estate in land.

 

If I wish to sell my property, how do I do so without a Certificate of Title?

All doc­u­ments to be reg­is­tered on the Tor­rens Reg­is­ter must be lodged by a sub­scriber, who must ver­i­fy the iden­ti­ty of their client and estab­lish that they have the right to deal with the land.

Lawyers and licenced con­veyancers are sub­scribers who can rep­re­sent clients to pre­pare and lodge deal­ings.

 

If I purchase a property after 11 October 2021, how do I show ownership?

A Title Search of the NSW Land Reg­is­ter.

 

What should I do with any CT that I hold now?

Despite the CT no longer being a legal doc­u­ment, it is still the client’s per­son­al prop­er­ty and should be treat­ed as such.

What­ev­er you wish. Maybe frame it as a memen­to like oth­er mem­o­ra­bil­ia or if of no sen­ti­men­tal val­ue you can destroy it.

Cur­rent­ly, rep­re­sen­ta­tive sub­scribers would be stor­ing thou­sands of CTs in safe­keep­ing on behalf of their clients.

When CTs are can­celled, some firms may wish to seek instruc­tions from their clients on what to do with their CT.

Oth­ers may want to just return CTs to their clients.

Oth­ers may want to take the ‘do noth­ing’ approach, or even destroy them. All are viable options a firm should con­sid­er.

If a firm is con­sid­er­ing destroy­ing a CT it is rec­om­mend­ed that instruc­tions are sought from the client in the first instance. Despite the CT no longer being a legal doc­u­ment, it is still the client’s per­son­al prop­er­ty and should be treat­ed as such.

Rep­re­sen­ta­tive sub­scribers don’t need to stamp a CT as “can­celled” or mark it in any way if return­ing it to their client after 11 Octo­ber 2021.

Like­wise, pre­vi­ous advice was to keep the CAC secure. From 11 Octo­ber 2021, the con­cept of the CAC is redun­dant and is no longer required to be kept secure­ly.

The Cer­tifi­cate Authen­ti­ca­tion Code (CAC) is an item of infor­ma­tion that is includ­ed on all new edi­tions of Cer­tifi­cates of Title (CT) print­ed at NSW Land Reg­istry Ser­vices since Jan­u­ary 2004. A CAC is a ran­dom­ly gen­er­at­ed num­ber that acts as a unique doc­u­ment iden­ti­fi­er used to deter and pre­vent fraud.

 

What is the impact on Landowners, Lawyers, and Conveyancers, Mortgagees?

Those who pay off their mort­gage will not receive a CT as was tra­di­tion­al­ly the case.

A pur­chas­er of prop­er­ty with­out the need for a mort­gage (a “cash-buy­er”) will not receive a CT.

When a plan of sub­di­vi­sion is reg­is­tered, and new parcels of land cre­at­ed, CTs (or con­trol of the right to deal (CoRD), will no longer be issued for those parcels.

From 11 Octo­ber 2021 there will no longer be a rem­e­dy under the Real Prop­er­ty Act 1900 to get a CT back from oth­ers, giv­en it has no legal effect.

From 11 Octo­ber 2021 lawyers and licensed con­veyancers (togeth­er, rep­re­sen­ta­tive sub­scribers) will no longer need to ask their clients for a copy of their CT when act­ing on a sale or when lodg­ing a deal­ing for reg­is­tra­tion.

Sub­scribers will no longer be request­ed to enter the CAC (Cer­tifi­cate Authen­ti­ca­tion Code) details tak­en from a CT for con­sent pur­pos­es in an Elec­tron­ic Lodge­ment Net­work Oper­a­tors (ELNO) work­space.

Rep­re­sen­ta­tive sub­scribers are advised to not use a CT as the sole source of evi­dence to estab­lish their client’s right to deal with the land.

Cus­tomers of banks whose mort­gages are dis­charged will not receive a CT when they dis­charge their mort­gage. Instead, the bank, as the lodg­ing par­ty, will receive an Infor­ma­tion Notice which they should pass onto their cus­tomers.

 

What do these changes mean for any equitable mortgages?

Equi­table mort­gages and liens secured by pos­ses­sion of a CT will become less secure once CTs are abol­ished. Firms who are hold­ing CTs as secu­ri­ty for pay­ment of costs are advised to urgent­ly make alter­nate arrange­ments to secure their debt.

 

What is an Information Notice and who receives such?

In all instances of prop­er­ty deal­ings with the NSW Land Reg­istry Ser­vice, an Infor­ma­tion Notice will issue to the Lodg­ing par­ty.

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 ref­er­ence, and the date of reg­is­tra­tion.

As an Infor­ma­tion Notice is not a defin­i­tive state­ment of the state 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.

 

What is the impact on customers of NSW Land Registry Services and the Office of the Registrar General in NSW?

Lodg­ing land deal­ings in paper will not be per­mit­ted from 11 Octo­ber 2021.

All land deal­ings to be lodged with NSW LRS can only be done elec­tron­i­cal­ly by a sub­scriber (e.g., a lawyer, licensed con­veyancer, or bank) to an Elec­tron­ic Lodge­ment Net­work Oper­a­tor (PEXA in our case).

All deal­ings regard­less of the date signed, will no longer be accept­ed for paper lodge­ment.

This may cause hard­ship to those who have pre­pared the deal­ing some time ago and are yet to lodge it. How­ev­er, the prop­er­ly com­plet­ed and signed paper deal­ing can still be lodged with NSW LRS, lodg­ing it as a PDF attached to the “Deal­ing with excep­tion Form”.

 

What protections against fraud do I have as the rightful owner of the property?

Under the Tor­rens title sys­tem, land title is guar­an­teed by the State Gov­ern­ment. In effect, the State Gov­ern­ment promis­es that the reg­is­tered landown­ers record­ed in the NSW land title sys­tem are the true own­ers of their land.

 

The Torrens Assurance Fund (TAF)

The State guar­an­tee of title is backed by the Tor­rens Assur­ance Fund (TAF), which pro­vides com­pen­sa­tion for any loss suf­fered as a result of fraud or error in reg­is­tra­tion. This guar­an­tee of title pro­vides cer­tain­ty and secu­ri­ty of own­er­ship and also ensures con­fi­dence in both the NSW land title sys­tem and the State econ­o­my.

The TAF is funded by a $4.00 levy on every dealing and caveat registered in the land titles system. The $4.00 levy will be adjusted annually according to CPI.
The TAF will continue to operate as it does today. That is, the NSW Government will continue to guarantee the Torrens titles and maintain the Torrens Assurance Fund. Applications for compensation from the TAF will still be made to the Registrar General.
This government guarantee underlies the integrity of the Torrens system.

 

If you have any ques­tions about con­veyanc­ing, par­tic­u­lar­ly eCon­veyanc­ing, then please get in touch with our team.

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