On 11 October the law changed so that certificates of title no longer have any relevance to the system of property ownership or transfer. So how do you prove you are the owner?

The old system

Since the 19^th century, New South Wales has had a system of registration of ownership of real property, based on a government issued certificate of title. The proof of your ownership was that you had an official certificate of title showing your name.

Similarly, when borrowing from a bank or lender, they held the certificate of title as security. When a mortgage was registered, the name of the bank or other lender appeared on the certificate of title.

The electronic system

Since 2013, the system has been shifting to an electronic model. This includes a system known as PEXA, for electronic conveyancing.

Banks have already transitioned to an electronic system which no longer involves certificates of title. However, from now on, transferring, mortgaging or leasing property is recorded electronically without certificates of title and without paper transfers, mortgages, leases et cetera.

Safeguards against fraud

If you don’t need a certificate of title to sell or mortgage a property, what is to stop someone impersonating you and selling or mortgaging your property?

The answer is that registration of almost all dealings with property, including selling, leasing or mortgaging must done by someone accredited by PEXA.

So, the first level of security is the tight accreditation process. The directors of Somerville Legal have been through the PEXA accreditation process. It is an exacting process requiring very strong evidence of identity. PEXA then issues registration, backed up by a physical dongle to be used when registering transactions.

The second level of security is that PEXA registered agents must carry out rigourous identity checks of their clients, similar to the hundred points required to open a bank account. We must also receive an authorisation form that we are satisfied has been executed by the owner of the property. We often organise electronic meetings with owners, for the purpose of verifying identity and executing the authority in a matter of minutes.

The system is secure. In the period since the PEXA system has been operating, there has been no reported case of fraud.

What this means for you

Our practice has been working with the PEXA system now for some time. It has been working well, after initial teething issues. During our recent lock downs, it was extremely helpful not to have to deal with paper conveyancing transactions.

If we are holding your certificate of title, we would be happy to return it to you, if you wish, to keep as a souvenir.

For more details, please contact Andrew Somerville or contact us on 9923 2321 enquiries@somervillelegal.com.au