The Transfer of Land Amendment Bill 2014 (Bill) has been introduced to the Victorian Parliament. The Bill proposes a number of amendments, including provisions to facilitate the phasing out of paper certificates of titles in preparation for the introduction of electronic conveyancing system.
The Bill also proposes to introduce “priority notices” to protect the interest of a party who has entered into a transaction relating to the land. A priority notice can only be used in respect of a lodgement using an electronic lodgement system, and must specify an unregistered dealing to which the transaction relates. A priority notice will prevent the registration of any other registrable dealings in respect of the land until the dealing specified in the priority notice is registered, or the priority notice expires (which will happen automatically after a period of 60 days from the date of lodgement).
A priority notice cannot be extended beyond 60 days; however a new priority notice can be lodged in place of the expired notice.
It appears from the explanatory memorandum that a number of amendments resulting from the Bill (including the introduction of the priority notice) have been introduced to facilitate consistent conveyancing practices Australia wide. Both Queensland and Tasmania have used priority notices as part of their conveyancing practices for many years, as a means of reserving a party’s right to have a dealing registered on title in priority to another dealing.
This is a substantial departure to long standing practices in Victoria. Traditionally, a person transacting with a registered proprietor would lodge a caveat on title as a notice to the world of their interest in the land. Importantly, in order to lodge a caveat, a caveator must be able to establish that it has a “caveatable interest”. Caveats also do not technically provide priority in respect of the interest being claimed, although practical priority may be achieved depending on the nature of the caveat.
It is unclear how the use of priority notices will impact on the current system in Victoria, particularly in view of the clear overlap in the circumstances when you might otherwise use a caveat to protect your interest in land.
Interestingly, instruments such as caveats, warrants, statutory charges and notifications are recorded, as opposed to registered, and therefore will not be affected by the lodgement of a priority notice. Interests in land pursuant to a charge or lease would still be protected by way of caveat.
We will provide further updates in respect of the Bill as it progresses through Parliament.
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