Property Law NSW Update: Electronic Lodgment of Paper Documents

COVID-19 has presented logistical challenges which have impacted land transactions and presented impediments to the lodgment of paper land dealings at the land titles office. To overcome these challenges, the Registrar-General has temporarily approved an electronic lodgment process for paper documents. ‘COVID-19 Residual Lodgment’ deals with the electronic presentation of paper land dealings under the Real Property Act 1900, as well as other paper documents and instruments, to the land titles office. The process is designed to safely and securely present paper documents to the land titles office.

Greg Stilianou, author of Thomson Reuters’ Baalman & Wells Land Titles Office Practice outlines the operation of the Registrar-General’s COVID-19 Residual Lodgment, a temporary lodgment procedure approved on 11 May 2020.

Notwithstanding that:

  1. the latest version of the Conveyancing Rules (version 5) has mandated electronic lodgment of mainstream land dealings (Discharge of Mortgage, Transfer, Mortgage, Caveat, Withdrawal of Caveat and Transmission Application), and
  2. there is capability to lodge other land dealings electronically (Notice of Death and Lease), not all land dealings are capable of being prepared and presented for lodgment electronically.

What’s the new process?

Under the COVID-19 Residual Lodgment process, it is permissible to send paper documents to the land titles office as a PDF attachment. The electronic file (being a scan of the paper documents that would otherwise be lodged over the counter at the land titles office) must be uploaded into an electronic workspace via an electronic lodgment network (ELN). The ELN will electronically send the PDF file to the land titles office for lodgment. The land titles office will treat the PDF version of the paper document as if it were lodged in paper over the counter.

After the ELN submits the document to the land titles office, the document status will be lodged and unregistered. That status will remain until such time as the documents are examined and, either, registered or requisitioned in the usual way paper documents are managed.

Keep in mind: A land dealing that must be prepared and lodged electronically under the Conveyancing Rules, must not be lodged via the COVID-19 Residual Lodgment.

PEXA and the authorised Electronic Lodgment Network (ELN)

PEXA is the only ELN operator (ELNO) permitted to offer the COVID-19 Residual Lodgment, which was set to roll out in two stages. Stage one kicked off on 11 May, the date in which paper land dealings affecting an electronically tradeable land title could be lodged, using the COVID-19 Residual Lodgment. Electronically Tradeable refers to a folio of the land Register that is capable of being the subject of a conveyancing transaction.

Not all folios of the land Register are capable of being the subject of an electronic conveyancing transaction, because ELNs cannot deal with all manner of notifications that could be recorded in a folio, and not all land titles are in the lot/DP or SP format (for example, land in manual titles follow the Volume-Folio format). Electronically tradeable refers to those folios of the Register that are not excluded from being the subject of an electronic conveyancing transaction. Eligibility for electronic lodgment is determined by the Registrar-General. The current list of folios that are electronically tradeable is updated in line with the expansion of ELN operations. In this situation, the electronically tradeable land title reference is entered when prompted in the workspace. Where the paper land dealing relates to more than one land title, instead of entering one or more of the land title references, the following prescribed reference must be entered: NO/REF/99999. The PDF version of the paper document will detail the full list of land titles affected by the land dealing.

RELATED: Managing Risk in Electronic Land Transactions

Next stage for COVID-19 Residual Lodgments

On 25 May, for all other documents (for example, paper land dealings affecting a land title which is not electronically tradeable, powers of attorney, deeds and memoranda (but not plans or documents relating to the water access licence register)), these may be lodged using the COVID-19 Residual Lodgment. In this situation, instead of entering a land title reference when prompted in the workspace, the following prescribed reference must be entered: NO/REF/99999.

In all cases, the practitioner subscriber is required to give the following certification before uploading the pdf document: The Certifier certifies that the attachment is a true copy of the Instrument, a duly executed version of which has been retained by the Certifier. The certification must be manually typed into the paper document’s cover sheet (also known as, lodgment instruction) and saved.

Once the certification is given, the paper document may be uploaded as a pdf into the workspace, categorising the file description to be uploaded as a ‘dealing’ (selected from the available options). One electronic pdf file (maximum size of 100 Mb) may be uploaded, only. Remember to remove any security on the document, such as password protections, and ensure the scanned version of the paper document is legible when opened.

If the paper document that is proposed to be sent to the land titles office requires a CoRD Holder consent, it must be prepared before the residual document is lodged. If the type of consent is a:

  • transacting party consent – it may be prepared in the same workspace as the residual document’s workspace; or
  • third party consent – complete a standalone consent to a paper dealing in a separate workspace to the residual document’s workspace.

PEXA’s COVID-19 Residual Lodgment process will provide for financial settlement (if it is required for the transaction), but it does not replicate other features associated with its usual electronic lodgment offering; there are no lodgment verification checks nor duty verification in the electronic workspace. Practitioners must continue to perform these processes and checks, in the usual way and in the same manner as if the paper document were going to be presented over the counter. When all manual checks and verifications prove to be acceptable to the practitioner, then the paper document ought to be scanned, uploaded and lodged electronically. Likewise, if a Notice of Sale form is required to accompany the paper land dealing, the paper form must be scanned and included with the lodgment case or the eNOS (electronic notice of sale) data supplied in the normal way via the land titles office’s eNOS facility.

Key requirements

When it comes to signing the paper documents that are proposed to be lodged electronically, because the document is prepared in paper, the usual rules apply. For land dealings under the Real Property Act 1900, a practitioner:

  • may execute the paper document for their client if the Registrar-General’s Guidelines provide that is permitted, otherwise, the client must sign;
  • cannot execute the paper document for their client under the authority of a Client Authorisation: Conveyancing Rules, rule 11; and
  • must enter into a Client Authorisation form with their client before using the COVID-19 Residual Lodgment process in an ELN: Participation Rules, rule 6.3.1.

As stated above, the land titles office will treat the PDF version of the paper document it receives electronically from PEXA as if it were lodged in paper over the counter. With this in mind, and whilst dealing with the temporary COVID-19 pandemic mechanisms for electronically signing, witnessing and lodging paper documents, practitioners must remember that land transactions affecting Torrens title land continue to be subject to the rules of priority for registration, the requirement for documents to be in registrable form at the time of lodgment, and the acquisition of an indefeasible title occurs by registration. Accordingly, it is important to keep the following rules in mind when lodging documents (howsoever that occurs) for registration under the Real Property Act 1900:

  • When the land titles office accepts a document presented for lodgment, it must allot to it a distinctive reference;
  • A document is lodged only when the land titles office has allotted to it a distinctive reference; and
  • The land titles office may refuse to accept a document presented for lodgment if it does not comply with any legal requirement made with respect to the document: sections 36(1A), (1B), (1C).

For related commentary about lodgment and priority for registration, and developments in property law in New South Wales, see Baalman & Wells Land Titles Office Practice and Westlaw.

Greg is the contributing author of Thomson Reuters’ subscription service, Baalman & Wells Land Titles Office Practice, as well as the author of the textbook Land Titling Law and Practice in NSW. He was a senior lawyer for the Registrar-General at Land and Property Information (LPI) for over 10 years and continued as a senior lawyer at NSW Land Registry Services until 2019. Since leaving NSW Land Registry Services, Greg has established his own legal practice, Greg Stilianou Legal and teaches at The College of Law in their property law Masters and Practical Legal Training. He particularly enjoys the mentor-like relationship he forges with his students.

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