Transfer or Nomination of ECT Control by Financial Institution once Mortgage discharged and title eC

[SusanH]

Hi, Just wondering what the industry standard is for authority to transfer ECT Control.   For instance the bank has discharged their mortgage but as the title is eCT, the bank retains control of the clear eCT.   To transfer control to the customer's solicitor is a letter from the solicitor acceptable or do we need authority from the customer with identify confirmed under the verification of identity standards?

[GeorgePolus]

Hi Susan,

In the scenario you cite, according to Land Use Victoria, a Party as CT Controller must not accept written instructions from a proprietors solicitor to transfer CT Control.   The Transfer of CT Control capability in PEXA should only be used in circumstances where the CT Controller is certain as to the identity and authority of the requesting party to receive CT Control.   The decision as to use Transfer of CT Control or the LUV procedure below rests with the CT Controller. 

The LUV recommended procedure is as follows.  Please note:   While this procedure, appears cumbersome, from an LUV perspective it is designed to ensure the security and integrity over title and who is afforded CT Control.

CT Controller (Financial Institution (FI)) must request of LUV to convert eCT to pCT.

LUV will return pCT to FI.

FI must physically give pCT to Proprietor, not Proprietors Representative.

Proprietor must physically give pCT to their Lawyer.

There is no electronic transaction made available by LUV to convert pCT to eCT.  (To do so would break the integrity of the chain).

The Lawyer in possession of the pCT must then either retain pCT in their safe or take pCT to LUV and request conversion to eCT naming Lawyer as CT Controller.

Please let me know @GeorgePolus if you have more questions. 

[SusanH]

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@SusanH wrote:

Hi, Just wondering what the industry standard is for authority to transfer ECT Control.   For instance the bank has discharged their mortgage but as the title is eCT, the bank retains control of the clear eCT.   To transfer control to the customer's solicitor is a letter from the solicitor acceptable or do we need authority from the customer with identify confirmed under the verification of identity standards?

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Yes, this seems very cumbersome especially as we are trying to move to the electronic world.   In other States we don't have to remain ECT controller on lear titles and there doesn't seem to be an issue with fraud.  It makes it very difficult to have so many different rules for different States.

[LauraEll]

Hi George,

Just wondering if this is still the procedure during COVID as LUV do not appear to be providing PCT's.

Thanks

[GeorgePolus]

Hi Laura

I have written to LUV to check if the procedure has been updated given Covid restrictions.   I will come back to you as soon as I hear back. 

Rgds

George

[GeorgePolus]

Hi Laura

LUV responded and advised there has been no change to the procedure.

Below is the response from LUV.

'No change in procedure, eCT control is still our base position for all titles back to a subscriber who lodged the transaction. The change of control request is moreover about the custodian then having reasonable certainty that they are handing to a party who should have control. This is a decision they would want to make based on some form of clarity.

The Registrar does not define what or how that looks.'

[CUCSW]

@GeorgePolus , can you please provide the link in LUV where it lists the preferred approach that you've typed out for us? I can't find it anywhere on LUV's website.  We are trying to come up with a position at our Firm.  Thank you.