Real Property (Priority Notices and Other Measures) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 26 February 2015.)

The Hon. A.L. McLACHLAN (17:15): I rise to speak to the Real Property (Priority Notices and Other Measures) Amendment Bill. I indicate at the outset that the opposition will support the bill. I also indicate that the Liberal opposition intends to file two amendments to the bill, which I will discuss briefly in turn.

This bill follows on from the introduction of the Electronic Conveyancing National Law (South Australia) Act 2013. Before the new electronic lodgement system can commence in South Australia, amendment to the South Australian Real Property Act 1886 is required. The bill before the chamber deals with the first stage of the amendments that are required to the Real Property Act. I note that all other states, with the exception of the Australian Capital Territory, have signed up to the new electronic lodgement system, and I note that there is an entirely different system in operation in the Australian Capital Territory.

The first amendment this bill deals with is the introduction of a process of priority notices, which is already in operation in a number of other states. This new regime will provide someone who is going to have an interest in the subject property an opportunity to register it as a priority. A priority notice is a notice that will be lodged against a certificate of title or crown lease to reserve priority for a pending transaction that will affect that land.

It can be lodged by any person who intends to lodge an instrument, such as a transfer, but they will not be mandatory. The priority notices will operate by preventing the registration of any instrument that is not listed in the priority notice. This is designed to try to ensure that, if anyone checks the title to the property and tries to register an interest, they will have to stand in line, so to speak.

The bill lists a number of instruments which can still be registered without a priority notice, which include, for example, caveats, statutory charges and court orders, to name a few. Priority notices will serve to notify parties searching the title that the transaction is pending. They will also increase the likelihood of fraudulent transactions being detected, and improve the accuracy of title searches, as currently no record of a conveyance appears on the certificate of title until the registry staff have updated the register book following settlement.

It is important that we have an orderly process for the purpose of registering lawful interests, and that they have a system that protects against fraudulent people who want to unfairly or illegally deny people their legal entitlement. The new process will be entirely electronic and will be effective for a period of 60 calendar days from the date of lodgement, with the possibility of extension for a further period of 30 days.

On this issue, amendments were moved and passed in the other place to deal with ensuring that the time from when the priority notice is registered to when it expires is automatically extended to facilitate the time between lodgement at the Lands Titles Office until it actually becomes registered on the title. This can sometimes be a number of days, due to weekends and overnight office closures, so the amendment is sensible and the opposition supports this approach.

The Liberal opposition intends to move a further amendment, which will require the Registrar-General to notify the registered proprietor of any notation of a priority notice on the title or lease. As the bill is currently drafted, there is no obligation on the Registrar-General to do so. It is the Liberal Party's view that the registered proprietor should be given the courtesy of notification of activity in relation to their title and an opportunity to respond where appropriate. This was raised during the debate in the House of Assembly, and the Attorney-General considered it was probably reasonable that the Registrar-General do so.

The second major reform that this bill introduces is a strengthening of the verification of identity regime. The new requirements will be consistent with a nationally agreed standard for verification of identity, which will be mandatory for electronically lodged documents when the electronic conveyancing commences. As I understand it, the new regime will follow guidelines, as it is intended that this will serve as an additional fraud prevention measure by ensuring that the people who have the lawful interest are the people actually receiving it. To do this, the new regime requires face-to-face identification with a 100-point check, and there is a certification procedure that goes with this. The opposition supports this approach. However, we intend to file amendments to cater for those people who live in remote areas and who do not have easy access to a local lawyer or conveyancer to provide this face-to-face verification service.

Examples were mentioned by the member for Heysen in the other place of purchasers who live in remote areas such as Roxby Downs and Coober Pedy where it may be impossible for them to have a face-to-face interview with a verifying agent. The member for Heysen also mentioned an example of someone who was in Canada and needed to travel over 2,000 kilometres to have their identity verified. The amendment that the Liberal opposition intends to file seeks to ensure that the practical implications of the new regime do not become overly burdensome for people who reside in the remote areas of our state or who may be travelling overseas at the time of the purchase.

The amendment will give the power to the Registrar-General to exempt certain persons from the verification requirements if the Registrar-General determines that they cannot reasonably be expected to participate in a face-to-face meeting. It is expected that this will be rare but, nevertheless, we should be ensuring that this legislation achieves its intended purpose of making property transactions easier, rather than more difficult, for all South Australians. I will conclude my remarks on the bill at this stage. I will have more to say at the committee stage in respect of the amendments to the bill that I have outlined.

Debate adjourned on motion of Hon. J.S.L. Dawkins.