The Real Property Amendment (Certificates of Title) Bill 2021 has passed through NSW Parliament, allowing for the cancellation of paper Certificates of Title in NSW. As part of the transition to an entirely electronic conveyancing system, the NSW Government is working towards abolishing all paper Certificates of Title in New South Wales by 11 October 2021, replacing them with electronic Certificates of Title.
A Certificate of Title (“CT”), also known as a title deed, is a formal legal document evidencing ownership of real property. This could be land, a house, a flat, a commercial or industrial property or farming property in New South Wales. It is a printed document showing a title reference, the name(s) of registered proprietor(s), and any registered dealings such as a mortgage or a lease and affectations such as a right-of-way, an easement, a covenant or a caveat, to name a few.
The original CT is often required to be presented to NSW Land Registry Services (also known as the Land Titles Office) when registering documents that affect the title of your property. This includes when registering the documents that finalise the transfer of the title of your property, or when selling your property.
The other common way that your CT may have been used in the past is to have it deposited with a lender (often a bank) when borrowing money against a property. The lender retains the CT as security for your mortgage. The lender would keep the original as evidence of having an interest in your property after taking a mortgage over it. It would also provide the lender with control over what other documents were registered on title. For example, a bank would not want a second mortgage registered on title without their prior approval.
Non-bank lenders (such as the bank of Mum and Dad) may also have held the original CT as security for repayment of their loan, so the property would not be transferred or mortgaged without their knowledge.
The transition to electronic CTs (“eCT”) has been underway for several years now. Paper CT’s that were held by banks as securities for mortgages have already been converted to eCTs. This upcoming change will finalise the conversion of all paper CTs that do not have a mortgage to a large financial institution on title, to eCTs.
If you currently hold your paper CT by October 2021 it will simply become a piece of memorabilia.
Historically, paper CTs have presented some of the following issues:
The change to eCTs will not change your ownership of your property, and evidence of your ownership of a property will still be recorded on the Torrens Title Register (“the Register”). For many property owners, the transition to eCTs will have little noticeable effect for them.
After completion of the transition of all titles in NSW to electronic format, your title will become a virtual record in an electronic register called the Register and your printed CT will lose its legal validity. If you sell your property, it will be transferred to the new owner's name via a process of electronic conveyancing on the PEXA platform (Property Exchange Australia), which is already widely used in Australia.
The change to eCTs presents an issue for non-bank lenders who hold the original CT but have not registered a mortgage on title to secure the loan. For these non-bank lenders, including any parents who have loaned money to their children, steps should be taken now to ensure the loan is adequately secured.
Is your information on the Register correct?
Have you changed your name since you became a registered property owner, by marriage or by any other reason?
Have you updated your name on the Register managed by the NSW Land Registry Services?
Or perhaps the property is still in your or your spouse's maiden name?
It may be the time to make an application to update your name on the Register before paper certificates are no longer valid.
E&A Lawyers are experienced in electronic conveyancing and can assist with selling or purchasing property, a refinance, a transfer of title or assisting you to update your name on the Register. Simply contact us today for a discussion and to obtain a quote.
For more information to arrange a consultation with a lawyer, you can call or email us.
Phone: 02 9997 2111
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This article is of a general nature and should not be relied upon as legal advice. If you require further information, advice or assistance for your specific circumstances, please contact E&A Lawyers.