Publication

Abolition of Certificates of Title - What does this mean for Charities and NFPs?

by Belinda Marsh and Joanne Grant
11 October 2021
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Authors: Ellysia Joannidis, Lawyer; Belinda Marsh, Partner and Joanne Grant, Partner 

Since 2017, the NSW Government has progressively mandated the use of electronic conveyancing (eConveyancing), which is an efficient and secure way of conducting settlement and lodgement transactions within the digital environment. 

Abolition of Certificates of Title                        

On 11 October 2021, New South Wales will complete its transition to 100% eConveyancing following new mandates by the NSW Government.  In completing this transition, we will see two key changes to the NSW Land Titles system as we currently know it:

  1. the abolishment of paper Certificates of Title (CTs); and 
  2. the requirement of all Real Property Act dealings to be lodged electronically.  

Taking effect from 11 October 2021, CTs will no longer be considered legal documents and any existing CTs will be cancelled.  If you currently hold a CT for your unencumbered property (i.e. no mortgage registered on title), or if you have a mortgage, you will not be required to do anything in response to this change.  However, the change will mean that you will no longer receive a CT when you purchase a property without a mortgage or if you pay off your mortgage from 11 October 2021.  A title search, which can be electronically obtained for a small fee, will show the most current status of the title of a parcel of land in NSW, including the name of the registered proprietor and what dealings encumber the title.

In addition to CTs, as of 11 October 2021 the NSW Land Registry Services will no longer be accepting paper Real Property dealings presented for lodgement.  All dealings (excluding Determination of Title Boundary) will need to be lodged electronically through an Electronic Lodgment Network Operator by a Subscriber, such as a law firm or conveyancer.  The Office of the Registrar General has published a full schedule of these electronic dealings, click here to view the schedule.  

What does this mean for charities and NFPs?

Many charities and NFPs own land from which their organisation operates.  If your organisation does not have any immediate plans to deal with property then the take away message is that the original CTs your organisation holds or a third party holds for the organisation will become obsolete on and from 11 October 2021.  A positive consequence to this change is that you will no longer need to worry about (or spend resources on) securing original CTs from theft or loss on and from 11 October 2021 as they will no longer have any legal effect.  

We do not recommend that you immediately attend to destroying original CTs once 11 October 2021 has passed as there may be the rare cases where the original CT may be required (for example, the CT may be required if the land in question is part of a bigger development that commenced prior to 11 October 2021).  We are of the view that it would be prudent to hold onto original CTs for 1 or 2 years before they are destroyed.

Going forward, registration of dealings that affect the title of land (for example the transfer of land or the registration of a new lease) will need to be organised through an authorised Subscriber.  Makinson d’Apice has been a registered Subscriber since commencement of electronic conveyancing in NSW and most lawyers and conveyancers in NSW would be registered by now or would have access to agents that are registered.  

Where a dealing has to be registered on title, registered Subscribers will have an obligation to take extra precaution to ensure that their clients have a right to deal with property when lodging electronic dealings on their client’s behalf.  This may mean that your property advisor may require your organisation to provide additional verification and authorisation (such as verification of identity of signatories and Client Authorisation Forms) in the course of assisting the organisation with registering land dealings.

Charity and NFP landowners can also take steps to protect their interest, including lodging a caveat over unencumbered property to prevent the registration of an incoming interest or dealing by other parties.  Obtaining title searches will also reflect the most current status of the title of any given parcel of land and periodic searches may be prudent depending on the circumstances relating to the land in question.  We recommend that you get in touch with your organisation’s property advisors to implement systems suitable to your organisation’s needs to ensure that the transition to 100% eConveyancing is as seamless as possible.  

If you have any queries in relation to these changes, please do not hesitate to contact us.