Electrifying your title documents – are you ready?
After more than 100 years of managing our property title documents through a meticulous paper-based system, the NSW Land Registry Services (LRS) is stepping into the digital age and has switched to electronic Certificates of Title (eCTs).
If you’re thinking ‘so what’, this is news for you if you have a paper based certificate of title. If you have paid out a mortgage on a property or purchased it outright, you should have a copy of this document.
The story so far
NSW LRS has converted paper certificates of title to eCTs where a financial institution (such as a bank) is first Mortgagee on Title. This occurred during the first four weekends in September 2018.
Electronic conveyancing (eConveyancing) is a more efficient, accurate and secure way of conducting the settlement and lodgment 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 enter a secure, online workspace where they can interact and transact together online. Within that digital environment, information can automatically feed in from the original source and can populate all documentation while the system cross-checks that information. Documents are created, signed and lodged within the online environment, and parties complete all necessary steps to settle the transaction within that online environment.
While there may be an adjustment period, most people will find eConveyancing a more efficient and secure way to transact. eConveyancing has the potential to deliver many benefits – particularly in the conveyancing process – including increased transparency, and a reduced risk of errors, fraud and delays.
Cancellation of bank held paper Certificates of Title (Bulk Conversion)
eCTs, (previously called ‘optional no-CT’) form part of the electronic conveyancing framework in NSW. They were designed to replace the paper Certificates of Title (‘pCT’) in an electronic environment.
An eCT brings a greater level of security than exists with paper. For example, an eCT can never be lost, misplaced or stolen unlike pCTs. Dealing with an eCT also requires measures to be taken to be satisfied that the owner has the right to take any action on a property and that their identity has been verified. Ultimately the source of truth for all matters relating to a person’s title is the Register, kept and maintained by the Registrar General.
By 1 October 2018, all pCTs held by Australian Deposit-taking Institutions (ADIs) were converted to eCTS. The following text on a land title search indicates that an eCT exists and who controls it:
“NO CERTIFICATE OF TITLE HAS ISSUED FOR THE CURRENT EDITION OF THIS FOLIO.
CONTROL OF THE RIGHT TO DEAL IS HELD BY [mortgagee name].”
Q1. Who is doing the bulk conversion process?
NSW Land Registry Services (‘NSW LRS’) will be carrying out the conversion process on behalf of the Registrar General. Please contact NSW LRS for any further questions on the bulk conversion process at email@example.com.
Q2. I have a paper Discharge of Mortgage which was not lodged by the ADI before this conversion process. What do I do?
A paper Discharge of an ADI Mortgage can be lodged if it is dated:
- before 1 March 2017 and is lodged as a standalone dealing.
- before 1 August 2017 and is lodged as part of a refinance transaction with an ADI.
- before 1 July 2018 and is lodged as part of a refinance transaction with a non-ADI.
- prior to the conversion of the paper CT and is lodged with dealing(s) other than mortgage(s).
In all cases above the Discharge of Mortgage should be lodged with the paper CT.
Q3. What if the Discharge of Mortgage is undated?
If the Discharge is undated it will be deemed to be dated after the relevant date in Q2 unless evidence to the contrary is provided.
Q4. I have paid out my mortgage. The bank says that I can no longer lodge the discharge myself and that it must be lodged electronically through PEXA.
Yes, that is correct. The bank must lodge the discharge through PEXA. A paper Certificate of Title will issue and will be delivered to the lodging party (your bank or their lodging agent) for delivery to you.
Q5. Previously when I paid out my mortgage I received a copy of the parchment Certificate of Title.
If the Certificate of Title that the bank held is an original parchment (a CT with a Volume and Folio) then the bank can deliver that to you for display purposes. It will be marked Cancelled and have no legal effect.
Q6. What does the bulk conversion process mean for conveyancers?
Parties involved in an upcoming settlement may not be aware that a title may have been converted. Parties should check via the NSW LRS CT Inquiry service that a CoRD Holder Consent has been lodged for their transaction, prior to attending settlement. An NSW LRS CT Inquiry can be performed through an NSW LRS approved information broker or NSW LRS Online.
Q7. What happens with an eCT in a paper settlement?
If your transaction is being settled and lodged using paper documents, a paper CT will not be handed over. Instead, the discharging mortgagee (CoRD Holder) must electronically lodge a CoRD Holder Consent through PEXA before settlement. The CoRD Holder Consent must specify all the dealings and parties to the settlement transaction.
If you hold a pCT, check with the NSW LRS about your next steps. Note also that all other States and Territories have plans to convert their titles approach. Contact the relevant State / Territory office if you own a property outright to obtain further information on each areas eCT roll out.
Thank you to Hae-Jung Kim from K&T Legal, Sydney, for input, site recommendations and early notification of the certificate of title changes.
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