Legislation update

Paper certificates of title redundant

By Daniel Pinti and Tracey Rundle / 05 April 2019

Key issues:

  • From 1 October 2019, paper certificates of title will no longer be used and will cease to be an instrument under the Land Title Act
  • From 1 October 2019, an equitable mortgage will no longer be created by leaving a certificate of title with a mortgagee
  • A number of other minor amendments to the Land Title Act are highlighted

On 26 March 2019 the Queensland Parliament passed the Land, Explosives and Other Legislation Amendment Act 2019 (Amending Act). The Amending Act introduces significant amendments to the Land Title Act 1994 (Qld) (LT Act) which sees paper certificates of title becoming redundant as part of the push towards a completely electronic conveyancing system in Queensland.  

The practical effect of these amendments is that as of 1 October 2019, the Registrar will not be able to issue paper certificates. There will also no longer be a requirement to lodge existing certificates in the Titles Office for future dealings with the land to which they relate. As a result, paper certificates will not provide evidence of an owner’s indefeasible title over property, and there will be no requirement to deliver paper certificates of title at settlement.  

A raft of amendments will be made to the LT Act to give effect to the Amending Act. Although many of those changes only reflect the removal of references to certificates of title as contained in the LT Act, some of the more substantive changes include: 

  • Removal of section 154 of the LT Act. This means that, where an instrument (for example, a transfer of land) is sought to be lodged and a paper certificate exists, the purchaser will no longer be required to lodge any certificate of title for cancellation with that transfer.  
  • An instrument (that has not already been rejected) lodged before 1 October 2019 but not registered because the paper certificate was not returned, may be registered despite noncompliance with section 154. For example, where a mortgage was lodged over land prior to 1 October 2019 without the certificate of title, after 1 October 2019, the Registrar can register that dealing, without the certificate of title having ever been lodged.
  • A certificate of title will cease to be an instrument under the LT Act, and as such, will no longer be evidence of the indefeasible title for the lot upon which it is issued. The electronic title maintained by the Titles Registry will be the record of ownership. 

Equitable mortgages

The amendments also have ramifications for the creation of equitable mortgages over property. Currently, section 75 of the LT Act states that an equitable mortgage can be created by leaving a paper certificate with the mortgagee. Under the amendments, that will no longer be possible from 1 October 2019.  

However, the omission of section 75 does not alter rights or obligations arising under an existing equitable mortgage created prior to 1 October 2019. A mortgagee wanting to enforce their security under an existing equitable mortgage arising pursuant to section 75 will still be required to prove that the equitable mortgage was created by the provision of a certificate of title. Furthermore, such an equitable mortgagee will still be required to enforce their security through an order of the Court.

If you would like to discuss any aspects of changes to the LT Act, please contact HopgoodGanim Lawyers’ Property team.

Authors
Daniel Pinti
Partner
Daniel is a Partner and the head of our Banking and Finance practice.
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