Where a paper Queensland Certificate of Title may not guarantee a mortgagee’s security
Paper Certificates of Title abolished in Queensland from 1 October 2019
As part of the transition to electronic conveyancing, amendments were made to the Land Title Act 1994 by the Land, Explosives and Other Legislation Amendment Act 2019 to abolish paper certificates of title from 1 October 2019. As a result, the holder of a paper certificate of title no longer has evidence of the indefeasible title for a property.
The electronic file maintained by the Queensland Titles Registry is the legal record of ownership.
Possession of paper Certificate of Title not sufficient to prove equitable mortgage – court orders required
Section 75 of the Land Title Act was also repealed on 1 October 2019. This means that where a mortgagee has received a paper certificate of title as evidence of an equitable mortgage over land, this will no longer be the case. In the explanatory notes to the Land, Explosives and Other Legislation Amendment Bill the solution to the problem is stated:
“The omission of section 75 is not intended to alter any rights or obligations under any existing equitable mortgage. If an equitable mortgagee wishes to enforce their security, they will still be able to prove that an equitable mortgage was created by the deposit of the certificate of title and seek appropriate orders from the court. Possession of the certificate of title alone has never given an equitable mortgagee the ability to enforce their security – an order of the court has always been required.”
A holder of a paper certificate of title as security over a real property should seek legal advice to ensure their interests are protected.
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Please note that this article has been prepared by Margaret Miller, partner of Bell Legal Group, for information purposes only. It is not legal advice nor should it be relied upon as such.