As some of you may already be aware the NSW Government has declared that from 11 October 2021 paper titles will be abolished (‘cessation day’).
Pursuant to Section 33AAA of the Real Property Act 1900 from the cessation day all current title deeds will have no legal effect and paper titles will no longer be issued by the Registrar General for any reason.
The Torrens Title register will remain as the single source of truth as to the ownership or interest in land.
Click here to read the Gazette notice by way of assistance.
Between now and the cessation day there will be changes made to the Conveyancing Rules, update of the Lodgement Rules and revocation of various Conveyancing Rules waivers.
From the cessation day:
1. All existing CT’s will be cancelled and no further CT’s issued;
2. CT’s will not be required to be produced when lodging a dealing or plan etc.; and
3. ADI’s will no longer be issued with CoRD.
Changes for landowners
- Those who pay off their mortgages will no longer be issued with a CT;
- A cash buyer will no longer be issued with a CT; and
- When a plan of subdivision is registered a CT and CoRD will not be issued for the new parcels.
In all of the above instances an Information Notice will be issued which will include confirmation of the dealings registered and the date of registration.
Landowners of unencumbered land who have a CT will not have to do anything before or after 11 October 2021. After this date the CT will no longer be a legal document.
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.
Changes for solicitors/conveyancers
From 11 October 2021 solicitor/ 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 Certificate Authentication Code (CAC) 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 for the purposes of establishing their client’s right to deal with the land. Further guidance on establishing a client’s right to deal with land can be found on the ARNECC website.
Where a subscriber has relied on a CT to establish right to deal in a transaction conducted before 11 October 2021, the CT, or a copy of it, must be retained in line with the requirements for retaining supporting evidence in the NSW Participation Rules.
For those who may be holding CT’s in safe custody on behalf of clients you may wish to contact your clients to take instructions on what your client wants done with the CT once it has been cancelled. Alternatively, you may wish to take the “do nothing” approach and wait until asked by a client for the CT.
If you are considering destroying the CT once it has been cancelled it is recommended you get instructions from your clients before doing so as the title is the personal property of your client.
It will still be necessary to obtain a mortgagee’s consent when dealing with a property. From the cessation day it will be necessary to request an “express consent” from the mortgagee and a copy of that consent will need to be uploaded to the electronic workspace for lodgement with the dealing. You can search the Registrar General’s Guidelines here.
Equitable mortgages and liens
Something important to consider is where a CT is being held as security for an equitable mortgage or lien because once the CT is cancelled the possession of the CT will be less secure. Click here to view important changes to equitable mortgages and liens. This would be particularly important for those who may be holding CT’s as security for costs.
You may want to consider what steps need to be taken to give additional security once the CT has been cancelled.
From the cessation date the Registrar General has declared all dealings listed in the Schedule of eDealings are mandated to be lodged electronically.
This list accounts for about 99% of all land transactions lodged with NSW Land Registry Services (LRS) and are all available for use now.
The remaining 1% of transactions are dealt with a slightly different process, which is explained in out-of-scope transactions below.
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. There will be amendments to the NSW Conveyancing Rules to repeal those parts which refer to a paper process. The current Conveyancing Rules waivers will also be revoked as they will no longer apply from the cessation day.
The Lodgement Rules will specify when out-of-scope electronic dealings can depart from the usual manner of preparing an electronic dealing.
Out of scope transactions/dealings
From the cessation day the process for dealing with out-of-scope transactions will require the preparation of the out of scope dealing in paper but it will be lodged electronically as a PDF attachment to the electronic dealing known as ‘Dealing with Exception’. Once lodged, NSW LRS will examine the paper dealing.
The Lodgement Rules will shortly be updated to specify the scenarios where the Dealing with Exception can be used. NSW LRS will provide comprehensive guidance before 11 October 2021 on how to use that dealing.
From now until the cessation day there will be a number of changes made to remove the paper process from the rules and legislation. Below is an estimated timeline:
- Update to Conveyancing Rules: mid July
- Proclamation of Real Property Amendment (Certificates of Title) Act 2021: end of July
- Revocation of Conveyancing Rules waivers: end of August
- Update to Lodgement Rules: end of August
If you have any queries or would like further information please contact the team at Antcliffe:Scott on 02 8215 1521 or via firstname.lastname@example.org.
Judy Howard. Licensed Conveyancer.