The NSW Government has approved the cancellation of all remaining paper certificates of title as part of the implementation of electronic conveyancing. All remaining paper certificates of title are expected to be cancelled in April 2021. Certificates of title will then no longer be evidence of indefeasible title. The By Lawyers Conveyancing and Property guides will be amended accordingly at that point.

Implications

• For solicitors and conveyancers any lien held over a certificate of title as a form of security for payment of costs will become ineffective.
• Equitable mortgagees holding certificates of title as security will need to make alternative security arrangements.

Alternative security for professional costs 

• A solicitor’s lien over all client documents created or obtained in the matter.
• Creating a charge for the repayment of costs over the client’s real property which entitles the firm to lodge a caveat on title until all costs are paid.
• Authority to pay professional fees and disbursements from client funds held in the trust account.
• Guarantee clause for the performance of the agreement by a guarantor, and creating a charge over the guarantor’s real property.

All By Lawyers Costs Agreements provide for these methods of security.

Alternative protection for lenders 

• Lien over other documents or assets held by the borrower to secure the repayment of the loan.
• Ensuring that loan agreements contain a right to register a mortgage.
• Lodging a caveat.

The By Lawyers Mortgages (NSW) Guide contain a ‘Mortgage Linked Loan Agreement’ that is linked to the mortgage and incorporates the provisions found in the By Lawyers ‘Registered Memorandum AJ843928’. A copy of the memorandum of common provisions is recorded at NSW Land Registry Services and can be used at no additional cost by our users.

The By Lawyers Mortgages (NSW) Guide also covers caveats and contains an ‘Acknowledgement of debt – Caveatable Interest’ that creates an interest in the borrower’s real property entitling the lender to register a caveat on the property to secure repayments.

Cancellation of ALL certificates of title

Keep an eye out for the upcoming cancellation of ALL certificates of title, paper and electronic, in NSW. This will see the removal of the requirement to lodge consents and changes to the requirements relating to verification of identity, right to deal and retention of proper evidence.

There will be another Obiter post from By Lawyers when our guides are updated for these developments.