What happens to your Certificate of Title on 11 October 2021?

During my time as a solicitor, I have constantly been reminded of the important role that a Certificate of Title plays to prove the ownership of property and to act as security.

By Josh Randall, Associate at Watts McCray, Parramatta

In New South Wales we are fast approaching a time in which the purpose of a Certificate of Title will have no use except to be a display piece hanging on your wall.

What is happening to your Certificate of Title?

The ability to lodge paper documents at NSW Land Registry Services has been steadily reduced in recent years to favour electronic lodgement of documents, which we were often told would supersede paper-based lodgement.

On 24 May 2021, the Real Property Amendment (Certificates of Title) Act 2001 was given Royal assent, amending the Real Property Act 1900 to allow the Registrar General to transition New South Wales away from a paper-based, land title driven process, to 100% electronic lodgement of land title transactions.

It came as no surprise that on 2 July 2021, a notice was published in the New South Wales Government Gazette, that the Registrar General had made an Order declaring that Certificates of Title would cease to be issued from 11 October 2021.

What does this mean for the future of the Certificate of Title?

Electronic Certificate of Title new home owners walking torward new home

Presently, where the title is subject to a mortgage, NSW Land Registry Services already cancels the Certificate of Title and issues the mortgagee (the lender) with CORD (Control of the Right to Deal), meaning that only the mortgagee has authority to consent to the registration of a dealing.

If you hold an unencumbered Certificate of Title (where there is no mortgage registered over the title), your Certificate of Title will remain valid until 10 October 2021. Similarly, if you are about to obtain an unencumbered Certificate of Title, NSW Land Registry Services will continue to issue Certificates of Title to landowners until 10 October 2021.

However, from 11 October 2021, no new Certificates of Title will be issued, and all existing Certificates of Title (regardless of where they are, or by whom they are held) will be cancelled.

Those Certificates of Title that are currently in circulation will no longer have any legal effect and as such will not be able to be relied upon as proof of ownership of land, or for the purpose of lodging a dealing. Similarly, no further CORD will be issued to mortgagees, and all recordings relating to CORD holders will be removed from the Torrens Register.

 What happens now?

The Torrens Register (maintained by New South Wales Land Registry Services) will become the sole record for ownership of land, and it seems that proof of identity will take the place of the Certificate of Title.

By removing the Certificate of Title as proof of ownership of land, there will be a greater reliance placed upon subscribers (lawyers and conveyancers) to verify the identity of their clients. Particularly as the ability to lodge electronic documents including the Certificate of Title will be limited to subscribers through an electronic lodgement network (such as PEXA).

There is still a lot to happen before 11 October 2021, amendments must be made to remove the paper process from the current rules and regulations, and new processes, rules and regulations must be created.

You can be assured from 11 October 2021, the Certificate will no longer be relied upon as proof of ownership of land.

What if I am holding someone else’s Certificate of Title as protection for a loan?

All Certificates of Title will be cancelled from 11 October 2021, and they will no longer be considered an effective form of security.

We recommend you take immediate steps to find an alternative form of protection, such as registering any unregistered loan or registering any caveatable interest.

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