100% e-conveyancing in NSW by October 11 2021
Today, the NSW Registrar General announced changes to Land Titles and Conveyancing in NSW.
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. This means that from 11 October 2021 paper dealings will no longer be accepted for lodgment and only electronic dealings will be accepted.
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 lodgment of land transactions.
There are two significant changes from 11 October 2021:
- the cancellation of CTs and the control of the right to deal (CoRD) framework; and
- all land dealings must be lodged electronically. This is referred to as ‘100% eConveyancing’.
1.Certificates of title
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 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.
What does this mean for me?
Conveyancing changes: 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 Lodgment 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.
Clients CTs: Currently, representative subscribers would be storing thousands of CTs in safe keeping on behalf of their clients. When CTs are cancelled, some firms may wish 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.
It is not necessary for representative subscribers 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.
Mortgagee consent: Mortgagee consent will still need to be obtained for the registration of certain dealings (refer to the Registrar General’s Guidelines). Previous reliance on CoRD holder consent or production of title does not substitute for express consent from the mortgagee to be bound by the terms of the dealing (as opposed to consenting for the title to be used for registration).
For example, when acting for parties to a lease of mortgaged property, if the mortgagee is to be bound by the terms of the lease, the Subscriber acting for the landlord will need to request an express consent from the mortgagee in writing and upload that onto the electronic workspace for lodgment with the land registry.
Equitable mortgages and liens: Equitable mortgages and liens secured by possession of a CT will obviously 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. For more information please see Important changes to liens and equitable mortgages.
The Registrar General has declared under the NSW Conveyancing Rules that all electronic dealings listed in the Schedule of eDealings are mandated to be lodged electronically. The list of dealings in the Schedule of eDealings accounts for 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 Lodgment Network.Amendments to the NSW Conveyancing Rules will be made 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 11 October 2021. The Lodgment Rules will specify when out-of-scope electronic dealings can depart from the usual manner of preparing an electronic dealing.
What does this mean for me?
All dealings, regardless of the date signed, will no longer be accepted for paper lodgment. 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, using the method described below for out-of-scope transactions.
The decision to make a hard cut-off is related to security of the system and ties directly into the cancellation of CTs and CoRD.
The same applies to old discharge of mortgages signed years ago; or transfers that clients had forgotten about and hadn’t been presented for lodgment in years. All these dealings can be lodged using the method described for out-of-scope transactions
What are the next steps?
From now until 11 October 2021, there will be a number of changes made to remove the paper process from the rules and legislation. The following will be made with 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 Lodgment Rules – end of August
We will continue working with stakeholders to ensure the cancellation of CTs and the transition to 100% eConveyancing is seamless.