CONVEYANCING TRANSFORMED | END TO END E-CONVEYANCING HAS ARRIVED

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Conveyancing Transformed

NSW Regional Roadshow David McDowell

Legal Officer eConveyancing, LPI

Priority Notices

Conveyancing Transformed- NSW Regional Roadshow

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Priority Notices

• Notification of intended registration of specified

dealing(s) with land

• Temporarily prevents registration of other

dealings (exceptions apply)

• Gives priority to the registration of specified

(unlodged) dealing(s)

• Automatically removed when ceases to have

effect or expired

Legislation

• The Real Property Amendment (Electronic

Conveyancing) Act 2015 introduced Part 7B

Real Property Act 1900

• Conveyancing Rules (Version 2, issued 28 October 2016)

– Rule 8.1- electronic lodgment only

• Available since 28 November 2016

Why lodge a Priority Notice?

• Effective risk mitigation tool for practitioners

– Black v Garnock [2007] HCA 31)

• Big head start in the “race to the Register”

• Protection in gaps between

– exchange and settlement

– settlement and lodgment (paper)

• Automatically removed when ceases to have

effect or expired

• Settlements where no CT

Priority Notices- the future without CTs

• New South Wales is moving to phase out paper

certificates of title, and a number of other states

have already done so.

• A Priority Notice will be very useful for parties in the

new world without paper certificates of title. After

lodging a Priority Notice an incoming party has the

assurance required to settle, knowing that that their

dealings are protected by the Priority Notice.

• In the current paper world parties get this assurance

from taking custody of the certificate of title at

settlement.

Priority Notices

• Priority Notice will operate for a specified period

– 60 days (with ability to extend once only for

30 days)

– during this period will prevent registration (but

not lodgment) of most other dealing(s)

• Recorded on the Register

Folio of the registerFIRST SCHEDULE

--------------

JOHN CITIZEN (T AY1234566 )

SECOND SCHEDULE (2 NOTIFICATIONS)

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1 RESERVATIONS AND CONDITIONS IN THE CROWN GRANT(S)

M 2 AY 1234567 MORTGAGE TO ABC BANKING CORPORATION

NOTATIONS

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PRIORITY NOTICES:

AZ1234567 EXPIRES 28/1/2017

DISCHARGE OF MORTGAGE AY1234567TRANSFER TO JANE MARY SMITH

UNREGISTERED DEALINGS: NIL

Priority Notices

• Expect majority to relate to settlement transactions -

transfers and mortgages

3 New Forms PEXA fee LPI fee

Priority NoticeWithdrawal of Priority NoticeExtension of Priority Notice

$8.80 $33.80 $8.80 $14.00$4.40 $14.00

All fees are inclusive of GST

Priority Notices• A Caveat noted on the Register will not prevent recording of a

Priority Notice.

• A Priority Notice noted on the Register will not preventrecording of a Caveat.

• A Priority Notice will prevent the recording of a Writ.

• A Priority Notice does not require a CoRD Holder Consent orthe Certificate of Title.

• Details in the Priority Notice cannot be altered. If theinformation relating to a transaction needs to be changedthen the Priority Notice must be withdrawn and a new PriorityNotice lodged.

Priority Notices

• Priority Notice can be lodged over part of a land

title for:

– one or more lots in an Auto -Consul

– a lot in an unregistered plan

– premises (for a lease)

Extension and Withdrawal of Priority

Notices

• The Subscriber who lodged the Priority Notice may

lodge an Extension or Withdrawal of Priority Notice.

• One only Extension for an additional 30 days giving

a total of 90 days from the date of its lodgement.

• The Priority Notice must be current at the time of

lodgment of Extension or Withdrawal.

• An Extension or Withdrawal must be over all titles

listed in the Priority Notice.

Dealings not prevented (s74W(2) RPA)

• a dealing in registrable form lodged before the Priority

Notice

• the dealing or dealings to which the Priority Notice relates

• a caveat or the withdrawal or lapsing of a caveat

• a vesting or dealing pursuant to an Order of Court or a

provision of a law of NSW or the Commonwealth

• a Transmission Application by Executors or Administrators

• an Application under s12 Trustee Act 1925

• a Notice of Death

Dealings not prevented (s74W(2) RPA)

• a dealing by a mortgagee or chargee (including power of

sale) where the mortgage or charge was registered or

lodged in registrable form before lodgement of the Priority

Notice e.g. Discharge of Mortgage, Transfer of Mortgage,

Transfer under Power of Sale etc.

• a dealing effected by the lessee pursuant to a right

conferred by the lease or by or under law where the lease

was recorded or lodged in registrable form before

lodgement of the Priority Notice, e.g. sub-lease, Transfer of

Lease, Mortgage of Lease etc.

Priority Notices- Consent

• The person who lodged the Priority Notice may

consent to the registration of a dealing or plan

which is prohibited by the Priority Notice.

• The consent must be in writing, signed dated

and addressed to Land Property Information,

NSW.

• The consent will be filmed with the affected

dealing or plan.

Priority Notices- scenarios

• If there are more dealings in the lodgment case

than in the Priority Notice

– eg, documents listed in the Priority Notice are

Discharge of Mortgage and Transfer

– dealings lodged are Discharge of Mortgage, Transfer

and Mortgage

– then LPI will register all dealings and remove Priority

Notice .

Priority Notices- scenarios

• If there are less dealings in the lodgment case

than in the Priority Notice

– dealings listed in the Priority Notice are Discharge of

Mortgage, Transfer and Mortgage

– dealings lodged are Discharge of Mortgage and

Transfer

– then LPI will send notice (and wait for lodgment of

Mortgage, consent, withdrawal of Priority Notice, or

expiry of Priority Notice).

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Priority Notices – Further Information

• Registrar General Directions

http://rgdirections.lpi.nsw.gov.au/e-dealings/priority_notice

• Priority Notice Circular

http://www.lpi.nsw.gov.au/__data/assets/pdf_file/0016/215431/2016-

14_Introduction_of_priority_notices.pdf

eCTs

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What is an eCT?

• eCT is an electronic Certificate of Title

• Paper CT is not printed and issued for the

current edition of the folio

• Electronic record on the Folio of the Register

• The record indicates the party with control of the

right to deal

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Current eCT Eligibility

• Real Property Act amended late 2013

– Option to request eCT for restricted parties

– s33AA and 33AB

• Currently eCT is available:

– to APRA regulated financial institutions,

– who are subscribers to PEXA or represented by a

subscriber to PEXA, and

– who are the first registered mortgagee.

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eCTs

• Currently eCT is only available following registration

of new electronic mortgages (optional)

• Over 30,000 eCTs issued

• 1 March 2017- eCTs to issue to eligible mortgagees

from all eMortgages

• 1 August 2017- eCTs to issue to eligible mortgagees

from paper lodgements

• Major banks looking to bulk convert CTs

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Title Search – eCT (CoRD Record)

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Historical Search – eCT (CoRD Record)

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Impacts of eCT

• Impacts everyone in the property industry –

surveyors, solicitors, conveyancers, financial

institutions, lodging parties, etc - not just PEXA

users

• Changes how mortgagees provide consent for

all dealings and plans

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Impacts of eCT

• CT not handed over at paper (or electronic)

settlement

• CT not produced to LPI for subsequent

transactions

• CoRD Holder Consent lodged through PEXA in

lieu of CT

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CoRD Holder Consent

• Alternative safeguards required to prevent fraud

when a paper CT is not issued

• For eDealings - Consent is with the dealings

• For paper dealings - Consent is lodged

separately (standalone)

• Only require CoRD Holder Consent for dealings

that would normally require the CT

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CoRD Holder Consent

Different consent types depending on the

transaction:

1. Transacting Party Consent – used for settlement

transactions

2. Third Party Consent – used for subsequent

dealings and plans (similar to production)

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Transacting Party Consent

• CoRD holder is a party to the transaction

• CoRD is passed over at settlement

• Examples:

– Discharging mortgagee for a DTM

– Discharging mortgagee for a refinance

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Third Party Consent

• Similar to the concept of production

• CoRD holder is not a party to the transaction

• Provided to enable registration of a subsequent

transaction

• CoRD holder retains CoRD after registration

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eCT and paper settlements

Conveyancing Transformed- NSW Regional Roadshow

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eCT and paper settlements

• A paper CT is not required for settlement

purposes

• If eCT – discharging mortgagee lodges a CoRD

Holder Consent prior to settlement

• The consent type is Transacting Party Consent

• Consent must specify details of the incoming

transaction

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• Complete Request for Consent eForm with

transaction details

• Submit request form to initiate lodgment of a

CoRD Holder Consent

• Available on the Registrar General’s Directions

with instructions

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eCT and paper settlements

Request for Consent Process

5. Contact the CoRD holder if details are incorrect

4. Check the CoRD Holder Consent before settlement

3. Vendor’s representative submits eForm to the CoRD holder

2. Complete the Request for CoRD Holder Consent eForm

1. Confirm there is an eCT

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Request for Consent Process

1. Confirm there is an eCT

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Request for Consent Process

2. Complete the Request for CoRD Holder Consent eForm

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• Request for Transacting Party Consent

• Purchaser/representative may partially complete

and forward to vendor/representative:

– Clause 4.1 of Contract for Sale and Purchase of Land

(2014 Edition)

– Purchaser must provide details to the vendor of the

incoming parties at least 14 days before completion

– Failure to do so may lead to settlement delays

Request for Consent Process

3. Vendor’s representative submits eForm to the CoRD holder

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• Vendor or representative submits Request to

CoRD holder

• The Request should ideally be submitted with

the Discharge Authority

Incomplete and/or incorrect requests may lead

to processing and settlement delaysExample

Request for Consent Process

4. Check the CoRD Holder Consent before settlement

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Request for Consent Process

• Incorrect information in the request must be

amended

– E.g. incorrect dealing types or party names

• Contact the CoRD holder to arrange a

replacement Consent

5. Contact the CoRD holder if details are incorrect

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Request for Consent Process- Third

Party

4. heck the CoRD Holder Consent

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Practice issues

• Contract for Sale does not deal with pCT vs eCT

– At settlement, must give good title

• Acceptance of eConsent instead of pCT

• 33AB Real Property Act Alternative to production of a certificate of title– (1) A statutory requirement for the lodgment or production of a

certificate of title that is imposed in connection with the registration of a matter may, if the relevant folio notes that no certificate of title has been issued, be satisfied by the person recorded in the Register (under section 33AA) as the person having control of the right to deal in the land providing electronic consent to the registration of the matter.

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Additional Information

• LPI Fact Sheet - Attending a paper settlement when the

Certificate of Title (CT) is in electronic format

• LPI Circular - 'Optional no Certificate of Title': practice

changes for settlement and lodgment of dealings and plans

• LPI CoRD Video

• RG’s Directions – information about CoRD and CoRD Holder

Consent requirements

• Request for CoRD Holder Consent eForms

• Law Society Journal July 2015, pp 84-5

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Benefits of eConveyancing

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• Less requisitions:

– Dealings are auto-populated with information fromthe Torrens Register

– Less data entry errors

– Dealings are verified before lodgment

• Title activity checks enables easy monitoring ofchanges to title e.g. caveats

• Dealings automatically unsigned if changes aremade or if fails lodgment verification

Benefits of electronic conveyancing

• Eliminates long interactions with banks to arrangesettlement

• Eliminates gap between settlement and lodgment

• Immediate confirmation of lodgment

• Earlier availability of cleared funds aftersettlement

• No need to physically lodge documents with LPI–particularly useful for caveats

• Easier access for rural and remote communities

• Can lodge Priority Notices

Benefits of electronic conveyancing

Conclusion

• www.lpi.nsw.gov.au/about_lpi/national_e-

conveyancing_nsw

• http://rgdirections.lpi.nsw.gov.au/e-dealings

• Sign up to newsletter, inquiries

eConveyancingNSW@lpi.nsw.gov.au

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