Key considerations for Queensland’s eConveyancing mandate – commencing February 2023
Earlier this year, we discussed Queensland’s move towards mandatory electronic conveyancing (eConveyancing). The Land Title Regulation 2022 (Qld) (Regulation) has now been issued, providing further detail on the initial scope of the eConveyancing mandate for Queensland commencing on 20 February 2023.
This article summarises the documents that must be lodged through an Electronic Lodgment Network Operator (ELNO) (such as PEXA or Sympli), the exceptions that apply, and our observations on the impact of this on Queensland’s property industry.
The Regulation prescribes the following documents as ‘required instruments’, which must be lodged through an ELNO from 20 February 2023:
- mortgages (and releases of mortgage);
- caveats (and requests to withdraw caveats);
- priority notices (and extensions or withdrawals of priority notices); and
- applications to be registered as a personal representative for a registered owner who has died.
The mandate only applies to freehold lot interests. Secondary interests in land (e.g. a lease) and any interests in water allocations are not included, so dealings with leases or water allocations (including any transfer or mortgage) are not captured by the Regulation and will not be required to be lodged through an ELNO.
There are a number of exceptions to the mandatory lodgment via an ELNO:
- ELNO limitations – if the ELNO does not have functionality to prepare, lodge or deposit the required document, or cannot be used on the day (and for the whole day) for reasons beyond an ELNO subscriber’s control;
- Registry limitations – if the land registry system does not have functionality to accept or process the document lodged using an ELNO;
- Combined transactions – if the document is to be lodged with another document that cannot be lodged using an ELNO (e.g. a plan, or any other dealing involving a lease or water allocation or a self-represented individual);
- Self-represented individuals – if a party to the document is an individual who is not an ELNO subscriber or represented by a lawyer or law firm; and
- Pre-commencement documents – if a document has been executed by a party in hard copy form before 20 February 2023.
There are also exemptions relating to documents replacing rejected or withdrawn dealings, as well as documents giving effect to a transaction that is not an ‘ELN lodgment’ or ‘ELN transfer’ under the Duties Act 2001 (Qld).
Titles Queensland guidance
The Titles Queensland website has been updated to include helpful guidance on the operation and impact of the Regulations, available here.
While the Regulations are simple in their scope and exemptions, there are a number of issues that may arise in practice, which should be considered.
During the course of a transaction, it may not be immediately apparent if an exemption category, such as an ELNO limitation or Registry limitation, will apply. All parties will need to ask appropriate questions and consider the documents before assuming the mandate will apply, and be familiar with ELNO and land registry limitations. Examples of transactions which are likely to be exempt are:
- transfers by a mortgagee exercising power of sale or when evidence of a charitable trust is required;
- a freehold if required to be lodged with a transfer and the seller (transferor) is a self-represented individual;
- transfers involving unusual ownership arrangements (for example, the same trustee of separate trusts in unequal proportions); and
- consent caveats.
The self-represented exemption applies only to individuals, not companies. A company which acts for itself in property transactions (for example, property developers who handle their own acquisitions or sales) will need to either become subscribers to an ELNO or engage a lawyer.
The exemption does not apply if an individual is represented by a lawyer or law firm, regardless of whether that lawyer or law firm is an ELNO subscriber. All lawyers involved in property transactions will need to ensure they are a subscriber to an ELNO before 20 February 2023.
How to claim an exemption
The mechanism to claim an exemption has not been released. We are hopeful that Queensland will follow other jurisdictions, such as New South Wales, where a simple form is required with no further substantiation.
It is important that the property industry (including developers, financiers, agents and lawyers) are ready for the commencement of the mandate on 20 February 2023, and we recommend preparing for this as soon as possible to minimise disruption to transactions and potential ramifications.
Our Finance and Real Estate teams have assisted developers and financiers in Queensland to prepare for this change, and are available to support you with this transition. With the deadline quickly approaching, we can support you in understanding the full impact of this change on your business or transactions, as well as provide training and development to help you practically prepare. For assistance or for further information, please contact the team below.
This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.