The rules governing whether to prepare a land dealing in paper or electronically can be complex. Here to untangle this complexity is property lawyer and College of Law adjunct lecturer Greg Stilianou, who will step you through what you need to know.
The starting point is electronic lodgment
While the requirement of electronic land transactions has been in place since 2021, it can be difficult to understand whether to prepare a land dealing in a paper format, or electronically.
“By way of background, in the Real Property Act 1900 (NSW), section 12E, the Registrar-General has powers to make rules known as ‘conveyancing rules’,” Greg explains. “It was through the publication of new versions of conveyancing rules that the Registrar-General implemented the mandate to require all land dealings, that is all land transaction documents, to be lodged electronically through an electronic lodgment network operator (ELNO), like PEXA.
“This has culminated in the final and latest version of the conveyancing rules, which is version 6,” Greg confirms.
This came into effect on the 11th of October 2021.
“It's through these rules, relevantly rule 8.8, where the Registrar-General has required all land dealings, caveats and priority notices, irrespective of the date that they were signed, to be lodged using an electronic lodgment network.”
The issue for practitioners is although this rule requires all land transaction documents to be electronically lodged, it's the preparation of the document that may not be capable of being electronically prepared.
“To understand why this has become a problem, we need to focus on the type of electronic land dealings that are available in an electronic lodgment network's functionality.”
As PEXA is the ELNO routinely used by the majority of legal practitioners, Greg focused on how this impacts PEXA.
“There are about 120 to 130 different types of paper land dealing forms that can be lodged with the Land Titles Office,” Greg says. “Most land dealings will be capable of being prepared and lodged electronically using a bespoke electronic form in PEXA’s functionality, but where there is no bespoke electronic form, the paper land dealing must be prepared. And because of the conveyancing rules, the paper land dealing must be electronically presented for lodgment.”
When can you prepare a paper land dealing?
Due to the requirement for electronic lodgment, legal practitioners need to know when it is permissible to prepare a paper land dealing.
“To answer this question, we need to look at the lodgment rules,” Greg says. “Section 12F of the Real Property Act 1900 (NSW) permits the Registrar-General to make rules, known as lodgment rules, about the lodgment of documents under the Real Property Act. This includes the requirements about the preparation, form and content of documents, as well as the procedures to be followed in connection with the lodgment of those documents.”
Rule 10 of the lodgment rules is entitled ‘lodgment requirements for the Dealing with Exception form’.
“The Dealing with Exception form is a generic electronic form that can be used to present a paper land dealing for lodgment with the Land Titles Office. However, it can only be used in limited situations. Rule 10 provides that use of the Dealing with Exception form is limited to the land transactions that ‘satisfy an exception’.”
Exploring the Lodgment Rules Exceptions List;
There is a list of excepted transactions which is referred to as the ‘Lodgment Rules Exceptions List.’ This is an 11 page document which includes various land dealings that cannot be prepared electronically.
“If your proposed transaction is listed in the Lodgment Rules Exceptions List, it means the transaction must be prepared in paper, but because of the conveyancing rules, that paper document must still be lodged electronically,” Greg explains.
“Once your paper land dealing is completed and prepared, any other document that needs to accompany that land dealing must be scanned with the land dealing as a single PDF file, uploaded into the PEXA workspace and attached to the generic electronic form of Dealing with Exception. Electronic lodgment of the Dealing with Exception can then proceed.”
The starting point is always that all land dealings must be lodged electronically.
“Whether you prepare the land dealing in paper or electronic will be dependent on whether the land transaction is listed in the Registrar-General's Lodgment Rules Exception List. If it is, then the transaction may be prepared in paper and then presented for lodgment electronically as an annexure to the generic electronic form called ‘Dealing with Exception,” Greg says.
“If the proposed land transaction is not listed in the Lodgment Rules Exception List it means there's going to be a bespoke electronic form to prepare and lodge with the Land Titles Office.”
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