Certificate of Title for a cash vendor

[RebeccaSoper]

Hi, a great question from a customer today.

If I have a cash sale what do I do with the original old CT after settlement?

[Patrick · Accepted solution]

Hi Rebecca,

The Vendor, or the Vendor's practitioner, will need to archive the original CT for seven years. Some practitioners have asked whether or not they need to hand it over to the Purchaser, the answer is no.

Cheers.

[GeorgePolus · Accepted solution]

Hi

The process for completing an electronic dealing for a title that is unencumbered by a Mortgage differs by jurisdiction.

Victoria

In Victoria a Nomination must be completed and lodged in PEXA to effect electronic lodgement of dealings on title.    

If at transaction commencement the title is paper, the Nomination must be completed by the party holding the paper duplicate Certificate of Title.  The Subscriber lodging the Nomination will be required to digitally sign that the title has been destroyed or marked invalid and securely stored. 

If at transaction commencement the title is electronic,  the Nomination must be completed by the party named as CT Controller on the Certificate of Title.

NSW

In NSW a title unencumbered by a Mortgage will always have been issued in paper format.  A Consent must be completed and lodged in PEXA to effect electronic lodgement of dealings on title.  The Subscriber lodging the Consent will be required to digitally sign that the title has been retained on file and securely stored.

If the date of issue of the title is post January 1, 2004, the Certificate Authentication Code (CAC) may be used in PEXA as evidence of Control of Right to Deal (CoRD).   

If the date of issue of title is earlier than January 1, 2004 there will be no CAC.  In this instance the title must be presented to NSW Land and Property Information (LPI).  The Production Receipt issued by LPI may then be used in PEXA as evidence of Control of Right to Deal (CoRD).

Western Australia

In WA there is no document such as a Nomination or Consent that needs to be lodged.  Nonetheless the process of handling differs depending upon the disposition of the title (paper or electronic) at commencement of transaction, 

If at transaction commencement the title is paper, the party holding the paper duplicate Certificate of Title will be responsible for entry of Holding Details (Issue Date and Issue Number) on the Lodgement Instructions of the dealing(s) to be lodged.  The Subscriber recording Holding Details will be required to digitally sign that the title has been destroyed or marked invalid and securely stored. 

If at transaction commencement the title is electronic, then there is no requirement to add information regarding the Certificate of Title.

Queensland and South Australia

In both Queensland and South Australia there are no special requirements for dealing with unencumbered titles. Note: If you have a Paper Certificate of Title for QLD you will need to follow this article.

[gmichael]

Hi all,

I note on the LRS website it provides that the Certificate of Title is "should not be marked as cancelled or destroyed" and that it must be retained for seven years.

It then provides that for or more information about supporting evidence and document retention requirements for PEXA subscribers, see the Model Participation Rules.

In Schedule 3 of the Model Participation Rules however it provides that:

"the Certifier has:

(a)   retrieved; and

(b)   either securely destroyed or made invalid

the (duplicate) certificate(s) of title for the folio(s)  of the Register listed in this Registry Instrument of Document."

Do we follow the Model Participation Rules or the LRS website?

Thanks,

Georgina

[GeraldineSutton]

I am just following up on Georgina's query from April 2018 as I can't see that an answer was posted by PEXA. 

Schedule 3 (Certification Rules) of the Model Participation Rules version 4 dated April 2017 it says: 

The Certifier has: 

(a) retrieved; and 

(b) either securely destroyed or made invalid 

the (duplicate) certificate(s) of title for the folio(s) of the Register listed in this Registry Instrument or Document.

This seems to say that after the sale settlement of a property where the vendor was the Cord holder and we acted for them on a PEXA settlement, the physical title deed can be destroyed. 

Can a PEXA staff member please confirm/clarify?

Thanks, Geraldine 

[GeorgePolus]

Hi Geraldine

The certifications applied by PEXA  to registry documents at the time of digital signing are those specified to PEXA by the jurisdictional Registrar.   PEXA does not make the rules.  The Registrar's make the rules.

In NSW, the Registrar has stated that their preference is that the title be marked invalid and securely stored rather than being destroyed.   I am aware that the certification is unclear in this regard.   Nonetheless, that is, or certainly has been in the past, the NSW Registrars preference. 

Please let me @GeorgePolus know if more information is required.   I will have to revert to NSW LRS to find out more. 

Regards,

George 

[GeraldineSutton]

Thanks George. 

Can you please send me the link to the part of the NSWLRS website that says retaining the CT for 7 years is the Registrar's preference? 

Thank you, Geraldine 

[SoniaC]

Hi George,

Can "securely stored" mean electronically stored or do we absolutely have to retain the original for 7 years?

I note the paper CT has been superseded by the registration of the transfer and either a new paper title issued in the purchasers name or the title reverts to an electronic version and the Control of the Right to Deal is then held by an Incoming Mortgagee.

I also note that Q2 of the FAQ in ARNECC MPR Guidance Note 5 (February 2019) states "Yes. Evidence can be stored electronically." 

Thanks Sonia

[GeorgePolus]

Hi Sonia

I am afraid the question you ask is of a legal nature.  I am unable to off a response.  

I recommend you contact the NSW Office of the Registrar General who will be best positioned to respond.   

Regards

George

[MichelleFinn]

Hi @GeraldineSutton. Link as requested https://rg-guidelines.nswlrs.com.au/e-dealings/procedures/evidence_for_electronic_instruments

Kind regards, Michelle