PEXA Alert: NSW CoRD Consents and Paper Transactions

This is a PEXA alert for practitioners and financial institutions that are taking security over real estate in NSW.

Due to the mass conversion of titles in NSW from paper certificate of titles (pCT) to electronic certificate of titles (eCT), an issue has arisen regarding the appropriate authority to deal with the title.

When a financial institution intends to take security over real estate in NSW, the financial institution and the practitioner (on behalf of the client), must be aware of and obtain “CoRD Holder’s Consent” prior to completing the loan and registration of the security interest.

This is especially relevant when completing a matter via a paper settlement which involves a title that has been converted to an eCT with an existing mortgagee on title.

What is CoRd Holder’s Consent and why is it important?

CoRD Holder’s Consent stands for Control of the Right to Deal.  It is the consent to deal with a title by either:

• the mortgagee that controls the eCT or retains possession of the pCT; or

• if there is no mortgagee on title, the registered owner who controls the eCT or retains possession of the pCT.

On PEXA, a CoRD Holder’s Consent is referred to as a “Consent”.

Prior to settlement, financial institutions and practitioners must verify that a CoRD Holder’s Consent has been given by either a mortgagee on title or the registered owner who controls the title.  If this is not done, no documents (including a mortgage or transfer of title) can be lodged or, if they are lodged, the documents will be rejected by the New South Wales Land Registry Services (LRS) as there is no authority from the controller of the title to deal with the title.

Either the mortgagee on title or the registered owner who holds the eCT or who retains possession of the pCT is required to lodge a Consent to the transaction that is due to occur via a paper lodgement or via PEXA.  For example, if a release, transfer of title and mortgage are involved, the Consent must note each of these dealings being consented to.

In Practice: Scenarios where CoRD Holder’s Consent are required

Practically speaking, the following scenarios are situations where financial institutions and practitioners will need to ensure that Consent is obtained prior to settlement:

Where an eCT is issued:

1. eCT control is with a mortgagee/registered owner and the lodgement of documents is via paper;

2. eCT control is with a mortgagee/registered owner and the lodgement of documents is via PEXA; and

3. eCT control is with a mortgagee and there is a lodgement of a subsequent mortgage (be it second, third etc).

Conversely, where a pCT is issued:

1. pCT is with a mortgagee/registered owner and the lodgement of documents is via paper;

2. pCT is with a mortgagee/registered owner and the lodgement of documents is via PEXA; and

3. pCT is with a mortgagee and there is a lodgement of a subsequent mortgage (be it second, third etc).

Other things to note

Financial institutions and practitioners should also be aware that:

• a CoRD Holder’s Consent is not required for the lodgement of a caveat;
• if the transaction is on PEXA and the mortgagee who controls the eCT or pCT is a party to the transaction they will need to create the Consent in the workspace, which will automatically be verified by the PEXA system;
• if the mortgagee who controls the eCT is not a party to the transaction they will need to do a separate Consent (via PEXA) to the lodgement. In this  case, they will need to confirm that the lodgement of the CoRD Consent has occurred via a CT Enquiry Search (see below on how to do this); and
• a CoRD Holder’s Consent may only be done through PEXA. Once again, this is referred to as a Consent on PEXA.

CT Enquiry Search: How to check the CoRD Consent Status?

To check whether a Consent has been lodged on title, the NSW LRS has offered a title status check via the NSW LRS website.  Financial institutions and practitioners can access this in the following manner:

1. Go to Certificate of Title (CT) inquiry (click here)

2. Click on View;

3. Insert the title particulars of the Lot(s);

4. It will advise whether a CoRD Consent has been lodged and the particulars of the CoRD Consent therein.

Authored by:
Craig Green, Partner
Daniel Wangatau, Associate