on 09-12-2018 03:11 PM
Just want to raise a concern in respect of the security of Certificate Authentication Code in NSW.
As a standard practice and one of the common questions in the Requisitions on Title Forms, the purchaser solicitor generally requests the vendor to provide CAC of the CT at least 7 days before settlement. This practice is understandable in a paper settlement, as CAC can be used to verify the CT. However, this is redundant in eConveyancing, as CoRD will be generated in PEXA.
In fact, CAC is more important than ever, as it can be used to generate CoRD. As it is the only information on the CT which is not publicly available, it is the "password" for CoRD. I would be reluctant to disclosure CAC to any other person, as it can be misused by others.
Does anyone agree with this? Or am I overthinking this?
09-12-2018 03:45 PM - edited 09-12-2018 03:48 PM
Is not the CoRD an even more secure method of control of the title? I think it is.
I'm not sure why the CAC would be disclosed to anyone not entitled to receive the Certificate of Title, although I imagine in the paper world the Purchaser might want to verify the Certificate of Title is legitimate before settling. I'm not quite sure what your concern is.
on 09-12-2018 04:14 PM
Thank you Barry.
In theory, once the purchaser receives the CAC before settlement, it can generate a CoRD by itself and transfer the title without further control by the Vendor.
09-12-2018 04:32 PM - edited 09-12-2018 04:35 PM
The Conveyancer would be breaking a whole raft of participation rules and probably end up in prison for fraud.
Not that this is scenario is likely to happen, but this is where Priority Notices come in.
on 10-12-2018 07:43 PM
With respect BGoodwin, if we could count on everyone to follow the law, we would not require security features at all.
My opinion is that it is entirely correct that the CAC - as the ONLY information required to generate CoRD in the PEXA system - should be kept secure and not disclosed to third parties.
Unfortunately some incoming mortgagees require a copy of the CT including the CAC before they will ready the purchaser's finances for settlement, but as a vendor, while providing this may be the practical solution, there is no legal requirement to provide the CAC, and you can validly (in my opinion at least) withhold the CAC and should the purchaser fail to complete, congratulate your client on their windfall of the 10% deposit.
on 10-12-2018 08:55 AM
I agree, and without a facility for unencumbered NSW paper titles to be converted to eCT's, I wouldn't be disclosing the CAC without a Priority Notice having been lodged. The sooner all matters are settled in PEXA the better