I have a client whose parent's were guarantor's for her loan. They provided me with a hard-copy title of a property they owned unencumbered and this was provided to the lender. My client paid down her mortgage to the point where her parent's guarantor obligation could be released. However, the hardcopy title was never returned and the lender doesn't know where it is. However, the lender has assured me that the title is now unencumbered again. My question is, is there any need for a hardcopy title to be held by my client's parents now that titles have migrated to electronic form?
This is an interesting situation, and I think there are a couple of possible scenarios and outcomes -
If the mortgage was never registered on title, then it will appear as clear or unencumbered to the land registry, and the duplicate title is likely to still be paper. A number of titles have been converted from paper to electronic format in recent years, but these have all had banks registered as first mortgagees. I do not believe that any bulk conversion activities have been undertaken with respect to unencumbered titles at this time. If the title is paper, an 'Application for a new Certificate of Title in place of one lost or destroyed' will need to be completed and lodged with the land registry. This can be completed in PEXA.
If the mortgage was registered on title, and the first-registered mortgagee is a financial institution who has had the titles in their possession converted to an electronic format, then the title will be electronic, with control vesting in the mortgagee. If this is the case, you will need to either arrange with them to have a paper title issue (they can manage this directly with the land registry), or to transfer control to a PEXA Subscriber who can then deal with it electronically.
The best way to check what format the title is in is to do a title search. You can then determine next steps.