CERTIFICATES OF TITLE ARE NO MORE IN NSW?

1. Transition to 100% eConveyancing
   • The Real Property Amendment (Certificates of Title) Act 2021 makes several changes to property legislation in NSW.
   • The two significant changes the Office of the Registrar General will implement beginning 11 October 2021 are that:
     • paper dealings will no longer be accepted for lodgement – everything must be lodged electronically; and
     • all certificates of title (CTs) will be cancelled and no longer issued.
   • These changes will implement the planned transition to 100% eConveyancing, making the process of buying, selling and re-financing real property in NSW a completely electronic process.
2. What do the changes mean?
   • From 11 October 2021, the NSW Land and Registry Service (LRS), will no longer accept paper dealings (with limited exceptions lodged through the “Dealing with Exception” process). This includes lodgement of leases and caveats.
   • It also means that paper CTs will no longer be effective from 11 October 2021.
   • The most impactful change in respect of electronic lodgements is leases. Leases have been available for electronic lodgement since 2019. Today, only about 50% of leases are lodged electronically. [1]  A lease for a term exceeding 3 years must be registered: see section 53 of the Real Property Act 1900.
3. Considerations for practitioners
   • Practitioners should begin using the electronic leases now in time to transfer all paper leases to electronic leases by 11 October 2021. You can access the LRS guide on electronic leases here.
   • If a practitioner is holding onto a CT for safekeeping, they should seek instructions from their client/s on what they would like to do with their physical CTs. The Office of the Registrar General will provide comprehensive guidance and assistance to help practitioners manage the change to electronic CTs.
   • Mortgagee consent will still need to be obtained for the registration of most dealings. Express consent is required to be uploaded onto the electronic workspace for lodgement with the LRS and previous reliance on CoRD holder consent or production of title is not sufficient.
   • This also means that any liens or equitable mortgages against CTs cannot be enforced as against the physical CTs from 11 October 2021, and other measures should be considered. This also speaks true for lenders that currently adopt the practice of holding a lien over CTs. They should consider other alternatives such as holding liens over other documents or assets held by the borrower (or including a right to register a mortgage).
4. Landowners and borrowers
   • The main change for landowners is they will no longer receive a CT when paying off their mortgage, purchasing a property, or subdividing their property.
   • In all instances an Information Notice will be issued, which will confirm the dealings registered and date of registration.
   • The Registrar General has published the following advice for landowners:
     • Landowners with a CT who plan to deal with their land in the next six months should hold onto the CT, even after 11 October 2021. This is because a transaction may begin before this date, but not yet be finalised. In this case, the CT may be needed to satisfy requisitions or other administrative notices that were issued before 11 October 2021.
     • Those who own unencumbered land, but have someone else holding or storing their CT, may wish to request to have it back. 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.

 Going forward…

• • The Torrens Title register is the single source of truth as to a person’s interest or estate in land. All documents to be registered through the LRS must be lodged by a subscriber. Lawyers and licenced conveyancers are subscribers who can represent clients to prepare and lodge dealings.
  • Assured Legal deals with property law and is already registered as a subscriber. If you have any queries or would like to speak to a member of our team about the above, please do not hesitate to contact us.

[1] See article  https://www.registrargeneral.nsw.gov.au/news/do-you-prepare-leases-for-your-clients-get-ready-for-11-october-2021