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Lawyers for local government

Going, Going, Gone – The End of the Line for the Duplicate Title! (July 4th, 2016)

Property officers will be aware that South Australia is in the midst of a shift towards implementing the National Electronic Conveyancing scheme (“the NEC”). The NEC enables conveyancing transactions to be conducted online and is intended to minimise costs and delays associated with settling land transactions and, to improve registration processes for dealings with real property.

To facilitate the implementation of the NEC in South Australia, the Real Property (Electronic Conveyancing) Amendment Act 2016 (“the Act”) was recently passed by Parliament. The Act, which contains significant amendments to the Real Property Act 1886, was assented to on 21 June 2016 and commences operation today, Monday 4 July 2016. There have been a number of changes to Lands Titles Office forms and processes to enable the transition to the virtual conveyancing platform.

One of the changes relevant for councils’ is that the Act removes the requirements for the Registrar-General to issue, and for a registered proprietor to produce, a duplicate certificate of title in connection with real property transactions.

Historically, the production of a duplicate title has been treated as the evidence of ownership and, therefore, a right to deal with the land. Further, the act of passing of the duplicate certificate of title from one party to another at the time settlement has occurred to protect the acquiring party’s interest in the period between settlement and registration.

However, the practice of issuing and producing duplicate titles is considered incompatible with electronic conveyancing and, as of today, duplicate titles will no longer be valid or of any legal effect.

The good news is that councils are no longer required to locate and produce a duplicate title in order to register documents on that title. The Certificate of Title for land will be stored and updated electronically by the Lands Titles Office (the Office will provide confirmation of registration electronically to relevant parties). This will reduce the administrative burden for councils in obtaining duplicate tiles in order to register a conveyancing instrument (including by removing the need to apply for a replacement when the duplicate title cannot be located).

Notwithstanding that a physical duplicate title will no longer be issued upon registration, title fees will still be required to be paid by councils as per the ordinary course of dealing. For example, where a new title is issued following an acquisition of land or the grant of an easement or land division transactions.

There has been no official direction from the Lands Titles Office regarding retention of duplicate titles. Councils have the option to either retain them for their historical records, or to securely dispose of them (i.e. in accordance with the requirements under General Disposal Schedule 20). From today, any duplicate title that is lodged with the Lands Titles Office will be securely destroyed upon lodgement.

Another efficiency arising from the commencement of the Act is that it will no longer be necessary to lodge Mortgages and Encumbrances in duplicate and Leases in duplicate or triplicate. Rather, with the commencement of the Act, all instruments will be lodged in the Lands Titles Office in single copy only.

Finally with duplicate titles having been made redundant, in order to preserve the integrity of property transactions, the Act introduces more stringent requirements for the parties to a transaction to formally verify their identity and their right to deal with the land. The obligation to verify that a council has authority to enter into the transaction rests with the council’s solicitors and conveyancers in relation to a transaction. In addition, councils will be required to formally execute ‘Client Authorisations’ to authorise a solicitor or conveyancer to execute Lands Titles Office forms and lodge them on the council’s behalf.

The majority of the changes contained in the Act are operational in natural. They are, therefore, primarily relevant for us when acting for councils in property transactions.

We will work with you to ensure a smooth transition in implementing the changes brought about by the Act.

If you have any questions regarding electronic conveyancing and the implications for your council please contact Cimon Burke at cburke@kelledyjones.com.au or on 8113 7105 or Chelsea Lucas at clucas@kelledyjones.com.au or on 8113 7111.