Summary of changes to Conveyancing requirements in South Australia

The Real Property (Electronic Conveyancing) Amendment Act 2016

The South Australian Real Property (Electronic Conveyancing) Amendment Act 2016 (the Act) will commence on Monday 4 July 2016. The Act will introduce significant changes to the existing conveyancing requirements. 
The changes introduced by the Act are summarised below. A copy of the Act can be obtained at www.legislation.sa.gov.au.

1. Removal of Duplicate Certificates of Title and Tenants Copies of Crown Lease

All Duplicate Certificates of Title (Duplicate Titles) and Tenants copies of Crown Lease (Crown Leases) will be invalid from Monday 4 July 2016.

From this date:

  • The Lands Titles Office (LTO) will no longer issue Duplicate Titles and Crown Leases
  • Duplicate Titles and Crown Leases will not need to be lodged in the LTO
  • Duplicate Titles that are lodged in the LTO will be securely destroyed.

1.1 Confirmation of Registration Notice

With the removal of Duplicate Titles and Crown Leases, a new Confirmation of Registration Notice will be generated upon the registration/recording of all instruments. This notice will be sent to the email address linked to the Agent Code for both the lodging and correcting parties (where they are different).

A sample of the new Confirmation of Registration Notice can be found here

2. Verification of Identity

Version 3 of the Registrars Verification of Identity Requirements will come into effect from 4 July 2016.

These have been updated to reflect the introduction of Client Authorisations and broaden the scope of transactions. Verification of Identity need only be undertaken for instruments which are intended to be lodged in the LTO.

3. Verification of Authority

Registrar Verification of Authority will come into effect from 4 July 2016.

Legal practitioners and conveyancers will be required to take reasonable steps to verify their client's authority to be a party to the instrument(s).

The Guidelines complement the Verification of Identity Requirements, and prudent conveyancing practice generally entails these two verification procedures being conducted at the same time.

Documents which could be used to verify authority may include:

  • Current local council or water rates notices for the land;
  • Current utility bills for the land;
  • A current land tax assessment notice for the property;
  • Loan documentation connecting the party and the land;
  • The mortgage granted by the Mortgagor;
  • The contract of sale for the land.

What constitutes "reasonable steps” will be dependent on the circumstances.

4. Client Authorisation

The Act introduces Client Authorisations which authorises a practitioner to execute a specific instrument, a batch of instruments, or instruments for a specified period of time on behalf of their client.

A Client Authorisation is required when a legal practitioner or registered conveyancer acts for a client in most conveyancing transactions. However, the use of a Client Authorisation for Caveats, Liens and Priority Notices is optional.

A Client Authorisation is not required for the following instruments relating to applications:

  • For title by possession to land;
  • For land division and applications for amalgamation of titles; and
  • Under the Community Titles Act 1996 and Strata Titles Act 1988.

5. Retention of Evidence

Evidence showing an instrument has been lawfully executed to be retained for a minimum period of 7 years from the date the instrument is lodged in the LTO. This evidence includes the Client Authorisation, and any documents used for Verification of Identity and Verification of Authority.

Additionally, some evidentiary documents which previously needed to be lodged in the LTO with instruments are now instead to be retained by practitioners. Practitioners will certify the instrument to show they have retained the documents.

Evidentiary documents which no longer need to be lodged in the LTO, with the exception of non-represented parties/applicants, as well as evidence which must continue to be produced, are listed below. Other determinations will be made on a case by case basis:

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6. Certifications

Instruments will no longer be executed by the parties. Instead, practitioners will execute instruments on behalf of their clients. Practitioners will execute instruments by making a certification.

The Registrar-General must not register an instrument unless the prescribed person has provided certifications (with some exceptions, for example those prescribed by Regulation 12 of the Real Property Regulations 2009) in regards to:

  • Verification of Identity
  • Client Authorisation
  • Evidence retention
  • Correctness and compliance of the instrument with relevant legislation and any Prescribed Requirements.

The “prescribed person” means a legal practitioner, registered conveyancer or the applicant / party to the instrument (where not represented by a legal practitioner or conveyancer).

The new Section 96 introduced by the Act requires the Transferor and the Transferee to execute instruments, where land is being transferred or a right-of-way or other easement is being created or transferred. Dual certification will also apply to Leases and Surrenders of Lease, except when the lessees are non-represented.

The table below summarises the certifications required for division applications under the Real Property Act 1886:

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7. Mortgages

A Mortgage which is executed solely by the Mortgagee can now be registered. In addition to the certifications listed above in Item 6, the Mortgagee (or their representative practitioner) must certify that that the Mortgagee:

  • Has verified the identity of the Mortgagor
  • Holds a Mortgage granted by the Mortgagor on the same terms as the Registry Instrument.

The Mortgage “on the same terms” and the evidence showing compliance with the Verification of Identity and Verification of Authority Requirements must be retained by the Mortgagee until the Mortgage is fully discharged.

7.1   Second Mortgagee - Consents

Previously where a second Mortgage was lodged over a property, consent was sought from the first Mortgagee and the Duplicate Title presented. Given the Duplicate Title is no longer required to be produced and instruments are always subject to prior registered interests, the consent of the first Mortgagee is not required to register a second Mortgage.

7.2   Indefeasibility

If a Mortgage is fraudulently executed and the Mortgagee failed to comply with Verification of Identity and Verification of Authority Requirements, the Mortgagee's interest under the Mortgage will not be indefeasible. The Registrar-General has the power to cancel registration of the Mortgage in these circumstances and to cancel registration of a Mortgage, if the Mortgagee lodged a Mortgage executed solely by the Mortgagee, but is unable to produce the corresponding Mortgage executed by the Mortgagor.

8. Discharge of Mortgage

Discharges of Mortgage must be lodged in the LTO by the Mortgagee.
Only Discharges of Mortgage which pre-date 4 November 2016 can be lodged in the LTO by the Mortgagor.

9. Caveats

A registered proprietor is allowed to Caveat their own property. Instruments lodged after a permissive Caveat will automatically be subject to the Caveator's claim. This is reflected in the removal of the encumbrance panel from LTO forms.

The Act allows the Registrar-General to prescribe instruments which can be registered or recorded in the face of a Caveat (unless the Caveat specifically forbids the registration or recording of that particular instrument - see regulation 13C of the Real Property Regulations 2009).

The Act also gives the Registrar-General power to enter a Caveat under Section 220(g) when it is in the public interest to do so.

10. Lodging in Duplicate and Triplicate

The Act amends Section 55 of the Real Property Act 1886 by removing the ability to lodge Mortgages and Encumbrances in duplicate and Leases in duplicate or triplicate.

Instruments should be lodged in the LTO in single copy only. 

11. Offences and Penalties

For false certification, fraudulent use of a digital signature, fraudulent alteration of a Client Authorisation, and the execution of an instrument on behalf of another person without a properly completed Client Authorisation.
Penalties generally have also been increased to align with more contemporary fines and prison sentences for offences under the Act.

12. LTO Forms

All LTO forms have been updated to reflect the new requirements. The revised forms can be found here.

As instruments are always subject to prior registered interests, the Encumbrance panel has been removed from all LTO forms.