From time to time in Victoria, we hear feedback from our members that they are reluctant to settle a matter electronically where they hold clear title on behalf of their vendor client.
When prompted further, it tends to transpire that they fear a laborious process of converting their client’s Certificate of Title from a paper to electronic format.
The good news is that it is not laborious in the slightest; in fact, quite the opposite. When holding a paper Certificate of Title (pCT) for a settlement that is occurring in PEXA, the title must be nominated to the lodgement case – in other words, the settlement. Since the major banks undertook a bulk conversion of titles where they were registered as first mortgagee in October 2016, the concept of ‘nominating a title’ is no longer foreign in Victoria.
When a settlement occurs electronically, and the title is not encumbered by a mortgage, the vendor’s representative must prepare and lodge a Nomination prior to settlement. If the title is a pCT, the act of nominating it also converts it to an electronic Certificate of Title (eCT), and it will then be controlled by the vendor’s representative. When signing the Nomination, and its accompanying Lodgement Instructions, practitioners must certify that they have retrieved and either securely destroyed or made invalid the pCT.
The document is prepared in the same PEXA workspace as the settlement itself, taking all of a few clicks of the mouse before signing and lodging. There is no cost to lodge this document with Land Use Victoria when settlement is occurring electronically.
If for some reason settlement does not proceed, the Nomination can be withdrawn in the same workspace, with control of the eCT being retained by the vendor’s representative.
Some of our members may have noticed that the major banks, and other financial institutions who have converted their pCTs to eCTs, no longer prepare nominations for PEXA settlements where they are the discharging mortgagee. This has been the case since Release 7 of PEXA was deployed, and many banks are now enjoying the benefits of having one less document to prepare for settlement.
Of course, law firms and conveyancing practices can also experience these benefits by converting the pCTs they hold on behalf of clients to eCTs, which they would control. When acting for vendor clients in PEXA, by virtue of creating and signing the Transfer of Land, they are taken to have consented to the dealing, rendering a Nomination unnecessary.
Firms who are interested in converting the pCTs they hold on-site at their premises to eCTs should contact Land Use Victoria to discuss.
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