Post Settlement Hangover

In a recent discussion I flagged the issue I have with our current settlement, stamping and registration regime. I made the observation that we hand over clear funds in exchange for title and a registrable instrument (ie the Transfer) and it is up to the lodging party to stamp and register the transfer with no guarantees.

Well this week we have had a shiny example of what can go wrong and the consequential repurcussions of delays in registration through requisitions from the State Revenue Office and caveats being placed on title before our client's Transfer could be lodged and registered.

Our client was a purchaser of an off-the-plan apartment in Docklands which he managed to on-sell to a subsequent purchaser.

First we looked at the possibility of flicking the Contract by way of nomination to the subsequent Purchaser (without profit). This would have meant substantial cost savings in stamp duty and mortgage set up costs. Timing issues prevented this happening. I could see the State Government was going to be the winner with two lots of stamp duty payable.

Our client settled his purchase. Problem one. State Revenue Office had a problem with the land & building statutory declaration as prepared by the Head Vendor. As all Victorian lawyers & conveyancers are acutely aware this is not surprising, given its complexity not just to practitioners but to clients as well. Result more stamp duty had to be paid. Winner State Government. Loser Client and Practitioners. Delay - 3 weeks.

Proceed to lodging with Land Titles Office. Problem 2. Registration refused. Intervening caveat had been lodged by subsequent purchaser. LTO had long abandoned policy of rejecting such caveats when no nexus being caveator and registered proprietor exists. Then we had legal practitioner for subsequent purchaser demanding $3000 for their consent to be given to registration of our transfer !@#? 100 / 100 for most silly stupid demand I have heard in a long time. Stupid demand for $3000 was withdrawn. Now her client is sitting / stranded in a hotel waiting for registration of our Transfer and our mortgagee to arrange discharge so she can settle and move in.

As I pointed out there needs to be a two phase settlement process.
1. Stamping & registration (in escrow) and then
2. handing over settlement funds upon which registration becomes absolute.

Such problems and other such like problems just disappear.

From a digital / electronic conveyancing perspective such as NECS there is probably merit to such an approach. Separate the processes. Less complexity and greater flexibility.