- Big four banks destroy 1.6 million paper land titles in push to digital versions
- By Simon Johanson
- 02/11/2016 Make a Comment
- Contributed by: Brian_P ( 6 articles in 2016 )
A Certificate of Title is an official land ownership record.
Australia's big four banks have quietly destroyed all paper land titles they hold for 1.6 million Victorian mortgagees, forcing property owners to use a bank-owned electronic transaction system.
Any future sales of properties whose titles are held by the bank will need to be transacted, at least in part, electronically.
The mass destruction of paper titles and their replacement with electronic certificates has been questioned by property lawyers who fear it will compromise security and effectively outsource the 150-year-old Torrens title system to private operators.
The Law Institute of Victoria has been an outspoken critic of the electronic system, arguing it increases costs for consumers, undermines those holding titles for security against other assets, and adds complexity and legal uncertainty to a what was once a simple, safe system.
The changes were ushered in by the Registrar of Titles who declared in a notice in the Victoria Government Gazette that paper based titles will be void and of no effect from October 22, 2016.
Property owners whose paper land titles are held by major banks were not told their title documents have been destroyed.
The conversion of paper certificates of title to electronic versions was part of a national push to electronic conveyancing on the PEXA system, a spokesman for Land Victoria said.
PEXA is owned by state governments, the ANZ, CBA, NAB, Westpac, Macquarie Bank and private equity.
"If landowners wish to get a paper title when their mortgage is paid out, they can do so," the spokesman said.
Bruce King from Kirby & Co. Solicitors said he conducted his first property transaction on the system last week and it was more expensive.
The transaction went smoothly but other lawyers encountered difficulties with banks failing to nominate a controlling entity which meant some settlements didn't get through, he said.
PEXA chief executive Marcus Price said paper titles were cumbersome to use. "People keep losing them, including banks," he said.
Most property fraud occurs with unencumbered paper titles being taken and used by other family members, he said.
"This is a long overdue catch-up by property to the two other big assets, shares and cash, which are exchanged electronically," Mr Price said.
"It is ultimately a much safer system," he said.
PEXA was set up in 2010 with federal government support after a meeting of the Council of Australian Governments urged modernisation of the antiquated system of paper-based transfers used by land titles offices and conveyancers.
The Titles Office in NSW is in the process of being privatised and South Australia is considering similar plans.
Any future sales of properties whose titles are held by the bank will need to be transacted, at least in part, electronically.
The mass destruction of paper titles and their replacement with electronic certificates has been questioned by property lawyers who fear it will compromise security and effectively outsource the 150-year-old Torrens title system to private operators.
The Law Institute of Victoria has been an outspoken critic of the electronic system, arguing it increases costs for consumers, undermines those holding titles for security against other assets, and adds complexity and legal uncertainty to a what was once a simple, safe system.
The changes were ushered in by the Registrar of Titles who declared in a notice in the Victoria Government Gazette that paper based titles will be void and of no effect from October 22, 2016.
Property owners whose paper land titles are held by major banks were not told their title documents have been destroyed.
The conversion of paper certificates of title to electronic versions was part of a national push to electronic conveyancing on the PEXA system, a spokesman for Land Victoria said.
PEXA is owned by state governments, the ANZ, CBA, NAB, Westpac, Macquarie Bank and private equity.
"If landowners wish to get a paper title when their mortgage is paid out, they can do so," the spokesman said.
Bruce King from Kirby & Co. Solicitors said he conducted his first property transaction on the system last week and it was more expensive.
The transaction went smoothly but other lawyers encountered difficulties with banks failing to nominate a controlling entity which meant some settlements didn't get through, he said.
PEXA chief executive Marcus Price said paper titles were cumbersome to use. "People keep losing them, including banks," he said.
Most property fraud occurs with unencumbered paper titles being taken and used by other family members, he said.
"This is a long overdue catch-up by property to the two other big assets, shares and cash, which are exchanged electronically," Mr Price said.
"It is ultimately a much safer system," he said.
PEXA was set up in 2010 with federal government support after a meeting of the Council of Australian Governments urged modernisation of the antiquated system of paper-based transfers used by land titles offices and conveyancers.
The Titles Office in NSW is in the process of being privatised and South Australia is considering similar plans.
Source: https://www.smh.com.au/business/property/big-four-banks-destroy-16-million-paper-land-titles-in-push-to-digital-versions-20161028-gsdcgn.html
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