Do you prepare leases for your clients? Get ready for 11 October 2021
The Registrar General recently declared that from 11 October 2021 all remaining dealings must be lodged electronically and no longer in paper. This includes leases.
At this stage, there’s a large difference between electronic lodgment rates for leases compared to other dealings. Today, only around 50% of leases are lodged electronically. All other electronic dealings are close to 95% electronic lodgment.
Practitioners are encouraged to start using the electronic lease now (for current lease preparations) so they are not caught out on and after 11 October 2021.
How to complete the electronic lease
The electronic lease only requires the landlord’s legal representative in the electronic workspace.
The landlord’s representative creates the electronic lease form and, from that, can generate a PDF rendition of the lease front page to provide to the lessee. The parties execute the lease terms and conditions as they do now (what has been, until now, an annexure to the lease front pages). Once the landlord’s representative has received the signed lease terms and conditions, a scan of this document is uploaded as the “Conditions and Provisions” in the workspace. It is then attached to the electronic lease form and the whole document is electronically signed and lodged (note that if the tenant’s representative is the lodging party then the paper lease form 07L will need to be uploaded in a different manner to be specified in the Lodgment Rules).
Use the resources below for step-by-step guides on completing the electronic lease.
NSW Land Registry Services guide on electronic leases
Registrar General’s Guidelines
Practical considerations to assist practitioners in preparing for electronic leases
From 11 October 2021 all Certificates of Title (CTs) and Control of the Right to Deal (CoRD) will be abolished. This means that the parties will no longer require the mortgagee to provide a CoRD holder consent to register the lease.
Even so, parties should continue to seek a mortgagee’s written consent to the lease before it is registered, so that the mortgagee will be bound to the lease: 53(4) of the Real Property Act. That written consent is then uploaded in the workspace and registered on the Torrens Register.
Electronic leases experience a significantly lower rate of requisitions to fix errors compared to leases lodged in paper. Less requisitions means quicker registration, allowing the tenant to secure the benefit of the registered lease more promptly.
The electronic lease makes it easier for the lease to be registered as the electronic workspace is directly connected to NSW Land Registry Services.
Having leases registered on the Torrens Register is important for the protection and security of tenants, whether they are a small business leasing a retail shop, or entities leasing large commercial premises.
Further resources
More information about electronic leases can be found at NSW Land Registry Services.
For more information on the transition away from paper-based processes, please see our Abolition of Certificates of Title webpage.