WA Amends Laws to Further Enhance Electronic Operation of Land Titles Register
Thursday 6 December 2018 @ 1.25 p.m. | Legal Research | Trade & Commerce
The Transfer of Land Amendment Bill 2018 (the Bill) was introduced into the Western Australian (WA) Parliament on 21 November 2018 by the Minister for Planning, Ms R. Saffioti. The Bill is intended to improve and streamline conveyancing in WA. According to the Minister this will be done by:
Background
The Bill builds on the Electronic Conveyancing Act 2014 (No. 2) (the ECA) which saw WA become the second state after Victoria to mandate electronic conveyancing using a purpose developed online platform known as "Property Exchange Australia" (PEXA). The platform is also used in New South Wales and South Australia, although it is not compulsory in either of those states. The PEXA platform was developed as a result of a 2010 Council of Australian Governments (COAG) directive that created a plan to develop a single, national property settlements system. Initially the platform was to commence operation in WA from December 2016, but that was delayed until May 2017 and that deadline in turn was further delayed to December 2018. While initially PEXA had government shareholders, including the WA Government, those original shareholders recently sold the business to a consortium of companies for $1.6 billion, after a share market float was not realised.
According to the Minister, the Bill has been drafted to improve and streamline conveyancing in WA. The amendments it makes are part of the general move towards a national electronic conveyancing system and permit the WA land titles register to operate in an electronic environment.
Key Areas of Amendment
This Bill amends three key areas of the Transfer of Land Act 1893 (the TLA):
- It modifies the definition of "counterpart documents" to improve the processing of mortgages electronically;
- Enables electronic service of many types of notice under the TLA; and
- Removes duplicate certificates of title from the conveyancing process, resulting in greater ability to conduct land transactions in a fully electronic environment.
Counterpart Documents and Improving Processing of Mortgages Electronically
Landgate is the business name of the WA Land Information Authority which was formerly the Department of Land Information, the Department of Land Administration and the Department of Lands and Surveys. It is also the statutory authority responsible for property and land information in WA. The first area of change proposed by the Bill is to create greater certainty around the enforceability of mortgages lodged electronically with Landgate.. This is a reform, the Ministers says, has been requested by financial institutions. At present under the TLA legislative impediments to signing mortgages in an electronic format, via an Electronic Lodgement Network, exist.
Although the ECA was amended in 2014 with the intent of enabling electronic mortgages, under the TLA it is still required that the paper mortgage signed by the borrower must be exactly the same as the electronic version held by the financial institution and lodged at Landgate. This could be interpreted as rendering a mortgage unenforceable even if there are only minor, immaterial differences between the hard copy mortgage signed by the borrower and the electronic version held by the lender and lodged at Landgate. This is said by the government to be an unintended consequence of drafting with the potential to undermine the industry's take up of electronic conveyancing. To fix this the provisions for counterpart documents are proposed to be amended to better account for differences in the same document, especially where a document exists in both paper and digital forms. Areas to be dealt with are differences such as a physical signature as opposed to a digital signature and differences such as different approved forms for paper and digital counterparts of the same document.
Electronic Service of Notice
Changes proposed in this area provide that electronic notice be issued in the majority of circumstances so as to streamline informal and formal notices served under the TLA. At present notices issued by the Registrar of Titles or the Commissioner of Titles may be served on registered owners or persons lodging land transaction documents at Landgate under the TLA in several circumstances. According to the Minister in her second reading speech, advancements in technology and a reduction in paper-based mail as a method of service, mean that the current notice provisions of the TLA are not flexible enough for the administration of a modern land registry, and could ". . . result in an inability to serve notices and a lack of clarity as to when a notice has been delivered".
Two examples of the lack of clarity referred to by the Minister are:
- Where a notice was unsuccessfully served by post, the TLA gives limited flexibility as to the potential actions that can be taken, that is, another notice can be sent, in a different format (for example an email), or service of the notice can be dispensed with entirely. This however, only applies where the notice is delivered by post, meaning there is no clear action to follow if an email notice is not successfully delivered. The result is, according to the Minister, that email then is not ". . . as useful as it might be".
- A further example cited by the Minister is, that the current TLA gives several different time periods for service of notice to be deemed to have occurred – on the next business day if within the metro area, or the second business day if not in the metro area. Postal delivery dates are subject to change, and it would be more flexible if the detail about how a notice can be served and when a notice is deemed to have been served were moved to the Regulations made under the TLA , rather than being in the TLA itself, which requires the TLA to be amended every time there is a change.
It should be noted that the proposed changes relating to notices also seek to deal with notices issued under documents that are lodged at Landgate. Preserving the existing method of service of notices under existing documents registered at Landgate but providing that all documents that are lodged at Landgate after the commencement of the Bill can provide for an electronic means of service (such as by email) as opposed to just facsimile machine.
Duplicate Certificates of Title Removed
Initially, the TLA land titles registration system was based on the premise that Landgate as the land registry would hold the paper certificate of title and the owner of the land would hold a duplicate of that paper certificate of title. From 1996 the TLA was amended to permit the Registrar of Titles to hold the land title register in "any media or medium" and currently they are held in a digital format. The issue of duplicate certificates of title has been decreasing rapidly since they became optional in 1996, and the Minister states, that in 2011 approximately 18 percent of freehold certificates of title had no duplicate issued. In 2017, this figure has risen to over 47 percent, and according to the Minister ". . . this trend appears set to continue". In her second reading speech the Minister states:
Queensland and South Australia have already removed duplicate certificates of title and the issue of removing duplicate certificates of title in WA has been consulted on, according to the Minister,
Status
At the time of writing (6 December 2018) the Bill is still at second reading stage in the Legislative Assembly.
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Sources:
Transfer of Land Amendment Bill 2018 (Bill No 111 of 2018) [WA] and supporting materials as reported in TimeBase's LawOne Service.
Electronic Conveyancing Act 2014 (No. 2 of 2014) and Bill and supporting materials as reported in TimeBase's LawOne Service.
PEXA's monopoly on e-conveyancing to end (Australian Financial Review, 16 May 2018)
PEXA sale windfall for WA Government (Sean Smith, The West Australian 24 October 2018)
