The Electronic Conveyancing National Law, Forged Mortgages and Immediate Indefeasibility [Sample Article]

The introduction of the Electronic Conveyancing National Law (ECNL), with its emphasis on the verification of identity (VOI) of the mortgagor by a mortgagee, is expected to reduce the registration of forged mortgages.

In this Property Law Review article, authors Penny Carruthers and Natalie Skead argue that a major deficiency in the ECNL is the failure to incorporate “careless mortgagee” provisions as they appear in the Queensland, New South Wales and Victorian Torrens statutes. The result is that the law in the remaining Australian jurisdictions is uncertain as to the effect of a registered forged mortgage to a non-fraudulent mortgagee who has failed to undertake mortgagor VOI. In Western Australia, the divergence in the law is even more pronounced by the enactment of s 105(3)–(5) of the Transfer of Land Act 1893.

This article explores the ECNL, the careless mortgagee provisions and s 105(3)–(5) TLA and considers the potential impact of each on three classic mortgage fraud cases. The authors conclude that careless mortgagee provisions ought to be included in all jurisdictions and s 105(3)–(5) ought to be repealed.

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Thomson Reuters recently hosted a free webinar, e-Conveyancing – Coming, Ready or Not. Christine Gray, Head of Commercial Real Estate & Skye Balasingham, Senior Writer – Banking and Finance at Practical Law Australia, provided an up-to-date primer on the mandatory use of PEXA for banking and conveyancing transactions, and offered guidance on how to remain vigilant in the management of systems and procedures. Click here to access the on-demand recording.

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