Cancellation of bank held paper Certificates of Title (Bulk Conversion)
Electronic Certificates of Title, or eCTs, (previously called ‘optional no-CT’) form part of the electronic conveyancing framework in NSW. They were designed to replace the paper Certificates of Title (‘pCT’) in an electronic environment.
An eCT brings a greater level of security than exists with paper. For example, an eCT can never be lost, misplaced or stolen unlike p CTs. Dealing with an eCT also requires measures to be taken to be satisfied that the owner has the right to deal and that their identity has been verified. Ultimately the source of truth for all matters relating to a person’s title is the Register, kept and maintained by the Registrar General.
The first step was to issue eCTs to an Authorised Deposit Taking Institution (ADI) on the registration of a first mortgage lodged electronically. This began in 2013 and was widened on 1 August 2017 to include issuing an eCT to an ADI registered with a first mortgage upon the registration of any dealing.
In 2016 the Minister for Finance, Services and Property at the time mandated a timeline for the take-up of electronic conveyancing. This included the replacement of all pCTs with eCTs by 1 July 2019.
The next milestone is 1 October 2018, by which all pCTs currently held by ADIs will be cancelled and replaced by eCTs (the conversion of p CTs held by ADIs to eCTs will be conducted during September 2018. The conversion timeline is set out below). On cancellation of the pCT, a recording on the relevant title will be made to show the issuance of an eCT.
The following text on a land title search indicates that an eCT exists and who controls it:
"NO CERTIFICATE OF TITLE HAS ISSUED FOR THE CURRENT EDITION OF THIS FOLIO.
CONTROL OF THE RIGHT TO DEAL IS HELD BY [mortgagee name]."
Each ADI will be converted on the following dates:
Sat September 1 ANZ (completed)
Sun September 2 CBA (completed)
Sat September 8 Westpac (completed)
Sun September 9 NAB (completed)
Sep 15, 16, 22 and 23 The ADIs listed in the attached spreadsheet
As of 1 October 2018 all paper titles held by ADIs have been converted to eCTs.
N.B. A list of trading names for ADIs can be found here: https://www.fcs.gov.au/which-adis-are-covered
Q1. Who is doing the bulk conversion process?
NSW Land Registry Services (‘NSW LRS’) will be carrying out the conversion process on behalf of the Registrar General. Please contact NSW LRS for any further questions on the bulk conversion process at email@example.com.
Q2. I have a paper Discharge of Mortgage which was not lodged by the ADI before this conversion process. What do I do?
A paper Discharge of an ADI Mortgage can be lodged if it is dated:
- before 1 March 2017 and is lodged as a standalone dealing.
- before 1 August 2017 and is lodged as part of a refinance transaction with an ADI.
- before 1 July 2018 and is lodged as part of a refinance transaction with a non-ADI.
- prior to the conversion of the paper CT and is lodged with dealing(s) other than mortgage(s).
In all cases above the Discharge of Mortgage should be lodged with the paper CT.
Q3. What if the Discharge of Mortgage is undated?
If the Discharge is undated it will be deemed to be dated after the relevant date in Q2 unless evidence to the contrary is provided.
Q4. I have paid out my mortgage. The bank says that I can no longer lodge the discharge myself and that it must be lodged electronically through PEXA.
Yes, that is correct. The bank must lodge the discharge through PEXA. A paper Certificate of Title will issue and will be delivered to the lodging party (your bank or their lodging agent) for delivery to you.
Q5. Previously when I paid out my mortgage I received a copy of the parchment Certificate of Title.
If the Certificate of Title that the bank held is an original parchment (a CT with a Volume and Folio) then the bank can deliver that to you for display purposes. It will be marked Cancelled and have no legal effect.
Q6. What does the bulk conversion process mean for practitioners?
To date, many practitioners may have not acted on a case where the title is an eCT. Please review the Circular issued by LRS about eCTs and lodgements of dealings here.
Parties involved in an upcoming settlement may not be aware that a title may have been converted. Parties should check via the NSW LRS CT Inquiry service that a CoRD Holder Consent has been lodged for their transaction, prior to attending settlement. An NSW LRS CT Inquiry can be performed through an NSW LRS approved information broker or NSW LRS Online.
Q7. What happens with an eCT in a paper settlement?
If your transaction is being settled and lodged using paper documents, a paper CT will not be handed over (unless it is one of the scenarios covered in Q2). Instead, the discharging mortgagee (CoRD Holder) must electronically lodge a CoRD Holder Consent through PEXA before settlement. The CoRD Holder Consent must specify all the dealings and parties to the settlement transaction. For more information click here.
Q8. A PEXA workspace has been opened before the bulk conversion and the mortgagee on title has created a CoRD Holder Consent (paper CT) for a Discharge of Mortgage. If the workspace is still active after the bulk conversion, does the mortgagee need to recreate the Consent?
The Consent can be amended to reflect the change in CT status, but the change in CT status means Registry Information (RI) will need to be resupplied. Accordingly, to avoid incurring additional RI fees, the workspace should be opened after the conversion where possible.
Updated: 22 August 2018