Are you buying or selling a property? Do you hold your title deeds? In this video, I discuss the upcoming cancellation of Certificates of Title in NSW, Australia and tips on what you need to know about Cessation Day and 100% eConveyancing.
Please follow this link to watch: https://youtu.be/t7s4r3CgJ3o
TRANSCRIPT
Today I’ll be taking you through a recent development in the area of conveyancing, which is the term for the legal process for buying and selling property, and that is the upcoming abolition of title deeds which has historically been the legal document which evidenced land ownership in Australia up until now. So clearly a really important, if not one of the most important, legal documents. I’ll be looking at the concept of title and ownership of land (which I’ll refer to interchangeably as “property” or “land” in this video because it actually encompasses all types of what’s known as real property, which is simply land or buildings so that also includes units or apartments as well). And I’ll be discussing what this document will now be replaced with moving forward.
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So, most people would have heard of the terms “title deeds” or “the deeds to my house” or the more technically correct “Certificate of Title”. When you purchase a property, that property has to be transferred into your name so that you have “title” to the property and the document which proves that you have title and therefore own the property is called the Certificate of Title, or CT for short.
The CT would contain a description of the land parcel and a unique number which is known as a folio identifier. It would also contain the name of the registered owner and it would list all of the registered interests affecting or benefiting the property, such as mortgages, leases, rights of way, etc. It also was printed on special paper and had several other security features. So as you can see – an incredibly important document.
Now, these documents have been used in the common law system for centuries. Then back in 1863 in NSW, to reduce the risk of fraud, we saw the introduction of a more modern and secure system of recording property ownership and that was the establishment of the Torrens Title System. Incidentally we also created the first electronic titling system in the world when the Torrens Register became digital.
Essentially, it was a system of title by registration which really means that there is one single indisputable or “indefeasible” title registered with the State and to complement that, the CT was a counterpart paper version provided to the owner for proof of ownership and the right to deal with the land. The State maintains the register and guarantees it as well, to eliminate any confusion around who owns a particular piece of property. In NSW, the register is kept by Land Registry Services but their name has changed several times over the years. They are currently called NSWLRS. Now, if you have a home loan and a mortgage say with a bank, which many Australians do, the CT would be held by the bank to make sure that nobody else, including you, could deal with the land unless they gave permission. So, the person or institution that holds the CT is effectively in control of the ownership of that property.
For completeness, I should point out that there are other types of land titling systems which still exist in NSW, and although most land has now been converted to Torrens Title you may still come across what’s known as Old System Title or Limited or Qualified Title, so a different process needs to be followed in those cases. But today I’ll just be looking at the Torrens Title Register, which also includes Strata and Community title as well but I’ll dedicate a separate video to explaining the differences between these three types of title.
In recent years, with the advent of electronic conveyancing or “eConveyancing” – so, that’s the electronic process for buying and selling property as opposed to the traditional paper based process – the old paper CT’s have gradually been replaced with electronic versions, or eCT’s, whenever there’s been a lender – like a bank – involved in the transaction. The lender had the right to deal with the property and had authority to consent to the registration of any subsequent interests in the property using a unique code. On the other hand, if you were buying the property outright, without a lender, then you would still be issued with a paper CT. That is, up until now.
11 October 2021 has rather dramatically been declared “Cessation Day” by the Registrar-General of NSW and what that means is that all certificates of title will be abolished from that date. Now, what does that mean for you?
Well, firstly, you’ll no longer have any kind of document to evidence your ownership of land or to hold onto as collateral, say, if you’ve lent money to someone else. If you do have possession of a CT for this purpose, you should contact your lawyer to prepare for this change because your interest will be less secure after Cessation Day.
Secondly, on and from Cessation Day, CT’s will have no legal effect and they’ll no longer be required in conveyancing or eConveyancing or to register an interest on title generally. So if you currently hold a CT, it is no longer the valuable legal document it once was, but perhaps you’d like to treasure it as a historical relic instead.
If you don’t hold your CT, then you don’t need to do anything BUT remember to contact your lawyer once you do pay off any loan against the property so that your mortgage can be discharged and the Register can be updated by removing your lender from the title. Then the property will solely belong to you and the Register will reflect this.
Thirdly, it means that only those known as “Subscribers” to an Electronic Lodgment Network Operator, such as lawyers and banks, can register an interest on the Torrens Title Register and there are strict compliance requirements around this, including the obligation to verify the identity of anyone wanting to deal with the land.
Finally, abolishing CT’s is intended to make transactions involving land easier and more secure for consumers and is the final reform for the land titling system in NSW to become 100% electronic, and other States around Australia are similarly moving towards this too.
So, that’s all I have for you today on Cessation Day and the Move Away from Title Deeds – remember to please “SUBSCRIBE” and hit the “Like” button if you liked this video. If you’d like to make an appointment to engage my services, please follow the link in the description box to contact me AND if you have any topics you’d like me to address in future videos, please leave a comment in the comment section as I’d love to hear from you. I hope you found this video helpful and thank you for watching!