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.
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:
Monday, 11 October 2021
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.
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.
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 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.
A Title Search of the NSW Land Register.
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.
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.
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.
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.
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”.
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 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.
If you have any questions about conveyancing, particularly eConveyancing, then please get in touch with our team.
