If you own property in NSW or are planning on purchasing property in NSW, there are changes to the NSW land title system taking effect from 11 October 2021 which could affect you. The main change to the system is the abolition of certificates of title.
What exactly is a certificate of title?
A certificate of title (CT) is a paper copy of the related folio on the Torrens Land Title Register (Register) that shows the legal owner/s of the property, the particulars of the property and other registered interests on the title. It is an official record of land ownership.
An electronic certificate of title (eCT) is an electronic record of land ownership. It is typically issued to a mortgagee (e.g. a bank) when a mortgage is registered on the Register and records that the party has control of the right to deal (CoRD) in the title.
What are the changes?
From 11 October 2021, all existing CTs will be cancelled and will no longer have any legal effect. CTs and CoRDs will no longer be issued.
How will this affect me as a NSW property owner or potential purchaser?
- If you pay off your mortgage, you will not be issued with a CT.
- If you are selling your land (and hold the CT because you own the land unencumbered) you will not need to produce the CT for settlement.
- If you purchase a property unencumbered (i.e. without the need for a mortgage) you will not be issued with a CT.
- When a block of land is subdivided and new parcels of land are created, CTs (or CoRDs) for those parcels will not be issued.
I have a certificate of title. What will happen to it?
If you own land unencumbered and hold a CT, and don’t intend on dealing with your land in the next 6 months, you don’t need to do anything. From 11 October 2021, the CT will not have any legal effect.
If you hold a CT and intend on dealing with your land in the next 6 months (e.g. selling), you should keep your CT even after 11 October 2021. If a land transaction commences before this date but is not finalised, you may be required to produce the CT to finalise the transaction.
If you hold a CT but it is stored by someone else, you may wish to request it back because from 11 October 2021, you will no longer have any legal remedy to get a CT back. This will not really matter though as the CT will no longer have any legal effect.
What will Fox and Thomas be doing with CTs held on behalf of our clients?
We currently hold many CTs on behalf of our clients. We intend to continue to hold those CTs unless our clients request them.
How will property ownership be proven?
In all instances where a CT would have traditionally been issued, an Information Notice will now be issued. An Information Notice will include the folio identifier, the dealing(s) that were registered including their registration number(s) and the date of registration.
If you need to determine ownership of land, this may be done by conducting a title search of the Register (upon payment of a fee).
For more information please contact a member of our property team at Fox and Thomas.