What are the Key Dates?

22 July 2017

• Australian legal practitioners, law practices and licensed conveyancers will be permitted to sign the National Mortgage Form.

1 August 2017

• Standalone mortgages involving Authorised Deposit-Taking Institutions (ADIs) must be lodged electronically.
• Refinance transactions involving ADIs must be lodged electronically.
• Paper certificates of title will no longer be issued to ADIs upon lodgment of paper documents.

1 January 2018

• All mortgages will be required to be lodged using the National Mortgage Form whether lodged in paper or electronically.

22 July 2017 – Signing the National Mortgage Form

On 27 May 2017, the National Mortgage Form (NMF) was introduced in paper. Since then, Australian legal practitioners, law practices and licensed conveyancers who act for mortgagees (Representatives) have not been permitted to sign the NMF in NSW.

The amended version of Rule 10 of the Conveyancing Rules now permits Representatives to sign the NMF from 22 July 2017, provided they give certain certifications. Amended Rule 10 also clarifies who may sign the NMF, and in each case, which of the certifications set out in Schedule 3 to the Participation Rules must be given.

The certifications in Schedule 3 to the Participation Rules cover:

• Client Authorisations between the mortgagee and the mortgagee’s Representative - certification 2;
• retention of evidence - certification 3;
• the taking of reasonable steps to ensure the mortgage is correct and compliant with relevant legislation and any prescribed requirements - certification 4;
• verification of the mortgagor’s identity - certifications 1 and 5(a); and
• a mortgagee obtaining a mortgage granted by the mortgagor on the same terms as the registry instrument or document lodged with the Land Registry - certification 5(b).

Certification 6 of the Participation Rules does not apply in NSW.

As provided under new Rule 10, the persons that can sign the NMF and provide certifications are:

• a mortgagee only, if they provide certifications 3, 4 and 5;
• a mortgagee’s Representative only, if they provide certifications 1, 2, 3, 4, and 5;
• a mortgagor and a mortgagee, if the mortgagee provides certifications 3, 4, and 5(a); and
• a mortgagor and a mortgagee’s Representative, if the mortgagee’s Representative provides certifications 1, 2, 3, 4 and 5(a).

Client Authorisations

For a Representative to sign the NMF on behalf of a mortgagee, the Representative must first enter into a Client Authorisation with the mortgagee. Pursuant to section 107 of the Real Property Act 1900 (NSW), a properly completed Client Authorisation has effect according to its terms.

New Rule 11 provides that the Client Authorisation form to be used between a mortgagee and its Representative is the form in substantial compliance with the form set out in Schedule 4 to the Participation Rules.

In respect of paper conveyancing transactions, a Client Authorisation may only be used for a Representative to sign the NMF.

The Client Authorisation form is set out on pages 30 and 31 of the Participation Rules. Alternatively an interactive version of the form is available on the ARNECC website.

1 August 2017 – Mortgages and Refinances

In addition to the current requirement for ADIs to lodge standalone discharges of mortgage and mortgages under the National Credit Code (NCC), ADIs will have to lodge the following further documents electronically, beginning 1 August 2017:

• mortgages whether or not the NCC applies to the mortgage, if signed on or after 1 August 2017; and
• refinances, namely, any combination of discharge of mortgage and mortgage where both mortgagees involved in the transaction are ADIs, signed on or after 1 August 2017.

Access the full list of ADIs on the APRA website.

The requirement to lodge mortgages and refinances electronically is subject to exceptions that are explained in more detail below.

Mortgages that cannot be Lodged Electronically

For a mortgage to be lodged electronically, it must satisfy certain requirements. If a mortgage does not satisfy these requirements, the mortgage must proceed in paper regardless of whether it involves an ADI and is signed on or after 1 August 2017.

First, the mortgage must be over an interest comprised in its own Folio of the Register. This means that any mortgage of an interest recorded in the Second Schedule must proceed in paper, for example, a mortgage of a mortgage.