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.
CoRD Holder’s Consent stands for Control of the Right to Deal. It is the consent to deal with a title by either:
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.
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:
Conversely, where a pCT is issued:
Financial institutions and practitioners should also be aware that:
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:
Craig Green, Partner
Daniel Wangatau, Associate