Torrens Title: Compensation For Loss

The NSW Law Reform Commission did an exceptional study to examine the extent of the State’s guarantee of title under the Torrens system and the manner in which it is provided. This was 20 years ago in 1988.

The 4 options put forward

• Abolition of the State guarantee of Torrens title.
  
• Retention of State guarantee but improvement of the current compensation schemes.
  
• Acceptance by registered proprietors of responsibility for insurance of Torrens titles (either in addition to or in substitution for the present State guarantee).
  
• Continuation of the State’s role as insurer of Torrens titles, but with the insurance provided by private insurance companies.

The following is the extract on the options for reform

OPTION 1: ABOLITION OF STATE GUARANTEE

A. The case for abolition

6.4 The New South Wales Law Reform Commission is of the view that there is a case for abolishing State compensation for losses sustained during the title registration process. The original rationale for the Fund may no longer be sufficient to justify its retention.

6.5 In 1862, provision of a right to seek compensation for loss of title to land was considered an essential part of the Torrens scheme, because it complemented the new concept of statutory indefeasibility and because it was necessary to placate the legal profession which was strongly opposed to the Torrens system.1 The possibility of confiscation of land without redress was one of the chief grounds on which the legal profession based its opposition to the scheme. However there is no evidence that the concept of indefeasibility has caused significant loss. Even after the acceptance of immediate indefeasibility in 1967 when more claims could have been expected, there has been no significant increase in claims for loss resulting from fraud. The one area where State compensation for loss may be justified concerns losses resulting from staff errors in the Land Titles Office. Even in this area the ordinary common law principles of tort law should provide adequate remedies to the person deprived.

B. The Issue

6.6 To what extent should registration confer the right to compensation on an innocent person who suffers loss in a land transaction? The State does not pay compensation if a title is unregistered, however diligent an innocent purchaser may have been. Similarly the State does not compensate the innocent victim of wrongdoing or mischance in other fields of registration of property eg motor vehicle registration. Why should it do so when the loss is title to land?

OPTION 2: RETENTION OF STATE GUARANTEE: ELIMINATION OF LEGISLATIVE DEFICIENCIES

A. Introduction

6.7 Arguments in favour of some form of compensation by the State rest on the changes that the Torrens system has made to the position of those dealing in land. Firstly, compensation is provided for losses which could not have occurred under the common law system of conveyancing but which the Torrens system makes possible, principally through the ease of effecting transactions. Thus, by the introduction of a system in which the Register is crucial and title may be transferred by a relatively simple process, frauds and forgeries are more easily perpetrated. Secondly, an essential aspect of the Torrens system, indefeasibility, means that the effects of forgery, fraud and Land Titles Office errors are far greater than under Old System conveyancing. At common law remedies such as ejectment have been designed to uphold the title of a plaintiff against someone claiming title through a forged or fraudulent transaction. These remedies have been curtailed in the interest of ensuring certainty of title as recorded on the Register. Compensation by the State thus fills a vacuum created by the Torrens system and protects against the potential harshness of the system in operation.

B. What types of claims for compensation should be allowed?

6.8 If it is accepted that the Government should provide compensation for losses arising from the operation of the Torrens system, the circumstances in which compensation is paid need to be identified. It is necessary to consider whether the following ideals of a Torrens system should be pursued, namely:

* that the Register of title be likened to a “mirror” in that it should reflect accurately and completely all facts and matters relevant to the title to a parcel of land, and that the State should compensate anybody suffering loss as a result of their reliance on the Register; and
* that the State should compensate those persons who find themselves wrongfully deprived of a registered interest (eg by the fraud of a third party)?


6.9 Even from the time of the earliest Torrens legislation in South Australia these ideals have not been fulfilled. Certain interests such as equitable rights have been excluded from the Register and no compensation has been payable in respect of them. Similarly there is an ever increasing number and variety of statutory rights which exist quite independently of the Torrens legislation. Even though they override registered interests and do not require registration or notification, no compensation is payable for losses resulting from ignorance of their existence.

6.10 As is clear from the discussion in earlier chapters of this Paper, there are several deficiencies in the existing State guarantee system. The major deficiencies which have been the subject of comment are set out below and tentative proposals are put forward to remedy them.

1. Reliance on the Register

6.11 Should compensation be paid to a person who sustains loss by reliance on the Register when it proves to be inaccurate? This question divides into two subsidiary questions. Firstly, should the Government be responsible for loss caused by the errors of its officers (for example, when through error an easement is omitted from a title or a dealing recorded on an unaffected title)? Secondly, should Government responsibility extend to the losses caused by statutory interests created independently of the Torrens Register?

6.12 It is now accepted that the Government should be responsible for the actions of its employees. It is by no means clear, however, that loss caused by error in the Land Titles Office should be compensated through a specialised compensation system. This type of loss could easily be dealt with under ordinary tort principles. There would, however, be difficulties in grafting such principles to a purely statutory system. Unless the questions of duty and standard of care owed by the State were left completely to the courts to develop (which, considering the relative rarity of compensation claims, might take a long time), they would have to be specified by statute. A purely statutory remedy for compensation, such as presently exists, at least provides security by guaranteeing compensation in specified cases.

6.13 The second question is essentially concerned with those decisions and proposals of government departments and authorities which, whilst not amounting to proprietary interests in land, may affect the value, use or enjoyment of a parcel of land.

Some commentators argue that such decisions and proposals affecting land should be recorded in the Register and compensation paid for loss occurring if they exist but are not recorded. However, the more usual view is that interests of this type are not appropriate for recording in the Register since they amount to neither legal nor equitable interests and would clutter the Register. It is accepted conveyancing practice that a purchaser should conduct numerous enquiries (apart from title) to ascertain the existence of statutory interests affecting the subject property. Aside from the argument of “completeness of the Register” there is little reason why this practice should change and the Government be made liable if this information is not recorded on title but available from other sources.

2. Wrongful deprivation

6.14 Should compensation be paid to individuals wrongfully deprived of their land or an interest in land? The primary source of such loss is the fraud or negligence of a third party. This may occur, for example, where a Certificate of Title is stolen from a private residence and the registered proprietor’s signature is forged on a transfer (to a bona fide purchaser for value) and the transfer is registered. The innocent purchaser obtains an immediately indefeasible title pursuant to the forged transfer. The effect of a forgery in the Torrens system is therefore prejudicial to the title holder whereas under Old System, an innocent third party acquiring land through a forgery would gain nothing and the owners title would not be affected. As the Torrens system gives the State power to control use of the public Register and all titles recorded on it, it could be strongly argued that the State has a duty to compensate.

6.15 Where a registered proprietor voluntarily signs a transfer under the influence of fraud there is not such a strong case for compensation. In such cases the victim must be assumed to have control over what is occurring. Otherwise, the State might be required to compensate a proprietor who has exercised poor judgment or made an unfavourable bargain. However it would appear reasonable that compensation should be available for loss resulting from mistakes made by the Land Titles Office and for loss by forgery of an interest in land resulting from the registration of another interest.

3. Negligence of claimant’s solicitor or agent

6.16 Should there be an exception to the right to compensation in the case of negligence or fraud by the claimant’s solicitor or agent? The aim of that exception in Victoria is to provide an incentive to the claimant to exercise care in relation to his or her choice of an agent. The exception gives rise to some anomalies. If the case involves the fraud or negligence of the claimant’s solicitor or estate agent, the claimant who fails against the Registrar or Registrar General may ultimately recover from the Solicitors’ Guarantee Fund or the Estate Agents Guarantee Fund, or from the solicitor’s or real estate agent’s professional indemnity insurance. There is no alternative source of recovery in the case of other agents. Moreover, arguments can arise in relation to which fund should provide the compensation. It might be simpler to allow recovery against the Registrar or Registrar General, with these officers having full rights of subrogation against the claimant’s solicitor or agent including their guarantee funds. However, having regard to principles of agency law, the negligence of a solicitor or agent may be imputed to the claimant. There is no good reason for making the State responsible where a claimant’s loss is totally attributable to his or her own negligence. The tentative proposal is therefore that there should be an exception from the right to compensation in the case of loss totally attributable to the fraud or negligence of a solicitor or agent of the claimant. Furthermore, apportionment of damages should be available in those cases where a solicitor or agent has been partially responsible.

4. Contributory negligence of claimant

6.17 A further issue is whether there should be an exception in the case of contributory negligence by the claimant. A claimant may cause or contribute to a loss in a variety of ways. For example, a vendor may have signed a transfer without first obtaining payment, or may have been negligent in safeguarding the duplicate title. There seems no reason in principle why the Registrar should be required to compensate people who have caused or contributed to their own loss. It would be anomalous to deprive a person of a claim because of an agent’s negligence, but to allow a claim where the negligence was by the claimant. Hence it is proposed that there should be an exception from the night to compensation in the case of loss totally attributable to the negligence of the claimant. As with the proposal relating to the situation where a solicitor or agent has been partially responsible, apportionment of damages should occur where both the claimant and the Registrar or Registrar General have been partially responsible.

5. Exhaustion of other remedies

6.18 Should compensation be payable only after remedies have been exhausted against the person primarily responsible? Litigation is time consuming and expensive. A person who had an action against a third party might be unable to afford the risks associated with litigation. This problem would exist only in cases of forgeries by a stranger if the proposal for excluding or reducing claims involving forgery by a claimant’s solicitor or agent were accepted. It is therefore suggested that there should be no requirement that other remedies must be exhausted before compensation is payable. Furthermore, in these cases it would be better to adopt a rule of direct liability, allowing the Registrar or Registrar General to join the person or persons primarily responsible or to bring a separate action against such persons by way of subrogation.

6. Administrative procedures

6.19 Should compensation be payable administratively or only in the context of litigation? The New South Wales requirement that an action be brought in the courts against the Registrar General is time consuming and a waste of resources. Like the exhaustion of remedies requirement, it poses a barrier to obtaining compensation. The Victorian method, involving an application to the Registrar, is preferable. This would enable the majority of claims to be dealt with relatively quickly and for those cases presenting some difficulty to the Registrar or Registrar General to be dealt with by the Supreme Court. It would also be preferable if there were a prescribed period within which the Registar or Registar General must make a decision.

7. Assessment of compensation

6.20 A further issue is the basis on which damages should be assessed. The flexibility of the New South Wales test (determined judicially) appears preferable to that of the stringent statutory test adopted in Victoria. A claimant should be entitled to recover for actual loss. The amount of damages should therefore be assessed at an appropriate date. In times of rapid inflation the date of payment would be the appropriate date for valuation. On the other hand, if there has been a significant decrease in property values between the date of the actual loss and the date on which the damages are to be assessed, a claimant should not suffer accordingly. Thus the appropriate date for determining loss will depend on the facts of each case. The principle should be that compensation is for the actual loss suffered.

8. Time for making claims

6.21 The final issue concerns the time within which a claim should be made. It is currently unclear whether a 6 year limitation period applies in New South Wales and Victoria by virtue of the general limitation statutes. In any event, in this area it is undesirable that time limitations be framed by reference to the date of the cause of action. There is a significant possibility of latent claims arising from errors and misconduct long in the past. In Victoria, the Land Titles Office has a policy of not using the limitation period as a defence to a-claim. This supports the case for reform of the limitation period. It is therefore proposed that the period of limitation should be six years from the date on which the claimant became aware, or, but for his or her own default would have become aware, of the existence of the right to make a claim.

9. Contribution to the fund on lodgment of dealings

6.22 If the State is to continue in its role as insurer of Torrens titles, consideration should be given to reintroducing contributions to the Fund by a levy on dealings. Before this scheme was abolished in 1940, the Assurance Fund was supported by a levy of 1/2d in the pound (0.2083%) for all transmission applications and primary applications. The contribution would in effect be similar to an insurance premium.

OPTION 3: STATE GUARANTEE PROVIDED BY PRIVATE INSURER

6.23 Option 2, that the State continue in its role as insurer of Torrens titles but with substantial changes being made to the authorising legislation, might be more attractive if the private insurance sector were involved. In other words, instead of the Government acting as its own insurer, perhaps a feasible option is for the State to use the services of private insurance companies in the same way as do local councils. Claims would be processed by the private insurers which would pass the costs of the system on to the Government by way of a premium. This option would have the advantage of setting an independent agency between the claimant and the Land Titles Office. It may also encourage the Registrar General to adopt risk management more widely.

OPTION 4: TITLE INSURANCE ARRANGED BY REGISTERED PROPRIETOR

6.24 The option of individual registered proprietors being responsible for insuring against loss of their titles or interests in titles was examined in Chapter 2. The experience with private title insurance in America was also examined. In those limited areas where a Torrens system operates in the United States, finance companies generally require private title insurance in addition to the guarantee provided by the Assurance Fund. Where they co-exist, therefore, the two systems are complementary. Title insurance policies generally exempt coverage for the kinds of risks assumed by an Assurance Fund.

6.25 An option for New South Wales and Victoria is for private insurance, either optional or compulsory, to wholly replace the current State-backed insurance schemes. A variation would be for the State to continue its indemnity for some types of risks (eg Departmental error) while allowing or requiring registered proprietors to insure against loss or damage from fraud, forgeries, surveyors’ errors and the like.


Links to the Study

Introduction pdf
Rationale for Compensation pdf
The Current Position In New South Wales pdf
The Current Position in Victoria pdf
Does The Legislation In New South Wales Or Victoria Accord With The Principle Ideals Of A Torrens System? pdf
Options For Reform pdf

Crown Copyright 2002

Review of title insurance by Pamela O'Connor | 2002
DOUBLE INDEMNITY – TITLE INSURANCE AND THE TORRENS SYSTEM

Link to Pamela's paper

In 1989 the New South Wales and Victorian Law Reform Commissions issued a joint discussion paper and an issues paper for a review of ‘the extent of the State guarantee of Torrens titles and the manner in which it is provided’.2 The issues paper indicated that the two Commissions proposed jointly to consider, inter alia, ‘whether private title insurance could be substituted for the existing State guarantee of Torrens titles’,3 and also whether it could complement the existing statutory Torrens indemnity schemes.4 Public submissions were invited on these and other matters. The Victorian Commission was disbanded before it could complete its reference. The New South Wales Commission continued alone and delivered its final report in 1996.
In the end, the contribution that private insurance could make to the operation of the Torrens System received scant consideration from the Commission, which recommended instead that the State’s statutory scheme should be remodeled

Given that a title insurer is now operating in Australia and New Zealand, it is timely to reconsider how private title insurance may affect the Torrens System. Will it contribute to achieving the twin objects of the Torrens System: to provide security of title, and to facilitate transactions by making them quick, cheap and safe?11 Along with the opportunities we must also consider possible threats: will the establishment of a private title insurance industry or the marketing of its products harm our State-administered system of registration of title, or the quality of our conveyancing services?

Part of Pamela's conclusions included

This paper has focussed on the first option, and concluded that private title insurance can contribute to the attainment of the economic objects of the Torrens System. Insurance can promote the ‘security of title’ object to the extent that it enables owners, purchasers and lenders to transfer to an insurer certain risks that the Torrens System leaves with them, namely:

1. loss in the pre-registration period arising from a matter that renders the interest void or unenforceable, or from loss of priority to a competing interest;
2. that the insured’s title will be subject to certain types of overriding interests;
3. that the insured will suffer loss through the fraud, forgery or negligence of his or her solicitor, or agent, or through a loss to which the insured has contributed through his or her own negligence, and that in some jurisdictions, indemnity will be excluded or reduced on ‘fault’ grounds.
   

This paper is very interesting as it alludes to some interesting options open to electronic settlement of property transactions.

What if the national system promoted electronic payment followed by electronic registration underwritten by a TI policy? That is payment and registration are not contemporaneus. In fact what has changed?

Murray Thompson MP - Hansard

Mr THOMPSON (Sandringham) — The annual statement of government intentions of the Brumby government is entitled Delivering for Victoria, but there are a number of key areas where there has been no delivery. One key example would be the proposed conveyancing reform system of Victoria.

Victoria has spent some $40 million on a system that cannot be used. It was warned four years ago by a number of stakeholders that if the project proceeded, it would not be able to be used. Since its launch last November not one settlement has taken place under the guise of this new system, but it is costing Victorian consumers many thousands of dollars per day as a result of the government’s failure to actually have the system enacted; people are still reliant on a paper-based system.

There has been widespread commentary on this issue. Rick Burbidge’s comment in the Australian was:

"The Victorian Government has forced the state’s home buyers to pay hundreds of thousands of dollars in extra government fees because disputes have hobbled its $40 million electronic conveyancing system.

As a result, thousands of people who have bought and sold property since November have had no alternative but to use the old paper-based conveyancing system that has been hit by government fee increases of up to 32 per cent."

Those disputes, which have been dragging on since last year, have led to a boycott of the Electronic Conveyancing Victoria project by the major banks and most of the state’s solicitors. Yet the government has still failed over the last months to work through and broker a solution. It has failed for four years to properly reconcile the interests of all stakeholders in the development of a key national system. The notion that the Brumby government is delivering for Victoria fails at the first jump.

ECV - No 1

ECV will have its first electronic settlement for a sale and purchase of a property in Victoria. This is a remarkable milestone. It is a first for an electronic financial settlement and registration.

David Rainbow, conveyancer, has created the first live ELF. David acts for the Purchaser. The Vendor has clear title and is represented by Gail Nancarrow. The lender is Bendigo Bank. Both conveyancers are fully subscribed members of EC.

As David said "the planets and the stars must have been aligned" to pull this one off. The odds were quite large given only Bendigo and Mecu are financial institution subscribers and a handful of legal / conveyancing subscribers are registered

I am told the settlement is due in April 2008.

Congrats

Ajilon and the VIC Government Celebrate

Ajilon and the VIC Government Celebrate on the Eve of the Nation's First Online Land Transaction

The current ‘paper chase’ that buyers and sellers of property in Australia must endure is soon to become a thing of the past for those living in Victoria.

Last month Ajilon General Manager, Bill Leropoulos, and his staff, Rick Dixon and Jim Walker, hosted a function to celebrate a key milestone achievement on the five-year long project they have been managing for their client, the Department of Sustainability and Environment (DSE), which will see this become a reality by January 2008.

The DSE’s Electronic Conveyancing (EC) System is a national first and will soon revolutionise the way property is bought and sold in Victoria, enabling those in the industry to complete all facets of their property transactions online.

Furthermore, a recent analysis by the Queensland Government revealed that EC System has enough depth and flexibility to accommodate Australia’s future electronic conveyancing needs, if it was ever rolled out nationally.

Rick Dixon, Project Manager of the EC project, shared the impetus behind last month’s function.

“We wanted to get all of the project stakeholders together to celebrate EC Release 2 going live, which involved the integration of the ASX and its Financial Settlement Manager.

“What we delivered was a world first and a major achievement for everyone on the project - it was one of those big milestones we had to reach, tying in many complex business, legal and technical aspects and we’ve done that, very successfully!”

As a long term partner of the DSE, Ajilon offered to host the celebration function for the key project stakeholders as a way of recognising the hard work each had put in.

The 60 guests included senior representatives from the DSE, including CIO Fiona Delahunt, along with representatives from partnering government agencies, such as Paul Broderick (Commissioner of the State Revenue Office) and Sue Nolen (Assistant Solicitor at the Victorian Government Solicitors’ Office).

Also in attendance were staff from Object Consulting, who were responsible for the application development, and a number of contractors who all played a role in helping EC Release 2 go live.

Fiona Delahunt gave a brief speech on the day, praising Ajilon for the role it had played in successfully delivering the difficult project for the Victorian Government.

The first complete, end-to-end online property transfer through the EC System will occur sometime next month. The DSE are planning an official media launch to mark the occasion.

Ajilon will continue to project manage the initiative for the DSE, until it can be transitioned into the Department’s core functions in 2008.

Ajilon

1 system or 8 or 16?

The push for a new forum comes as the Commonwealth Attorney General Mr McClelland moves to prevent one major harmonisation project from falling apart.

Victoria and Queensland are trying to torpedo two-year old plans for a national electronic conveyancing system. The project aims to come in 2010 and would enable paperless transfers of land seamlessly across all jurisdictions.

At a meeting last week, chaired by former NSW premier Bob Carr, the two states drew up plans to kill off the idea (of the single national electronic conveyancing scheme)

The federal Attorney-General described the meeting as regrettable and an example of people pursuing fiefdom interests. "There's a need for a reality check," Mr McClelland said. "We don't want to create a version of the different rail gauges, with people having their separate and discrete systems that can't talk to each other, That would be vandalism of a very important project."

Under Victoria's and Queensland's plan, software developed in Victoria - which the private sector has refused to use - would be rolled out individually by each state. But NSW, banks and law societies insist all states keep to the original plan, which envisaged a national entity to handle all property transfers. They argue it is essential to avoid "jurisdictional creep" leading to discrepancies in separately run state systems.

Mr McClelland said he would use the meeting of attorneys-general to request states to put their cards on the table and declare their agendas, with a view to possibly elevating the project onto the COAG agenda. Victoria led the charge to reject the two-year-old plans in the hope of salvaging its own $30 million online conveyancing project.

Matthew Drummond | The Fin Review | 14 March 2008

Extract from an Article on national legal uniformity

Electronic future

IT is still too early to be sure, but it looks as though those who want to build a national electronic conveyancing system have found a friend in Robert McClelland. The federal attorney-general, unlike some state government bureaucrats, seems to understand that e-conveyancing will never work unless the interests of business are addressed. The test will be whether McClelland is prepared to exert a little muscle to persuade his state counterparts to embrace the same approach.

Mr McCleland planned to talk to South Australia's AG Mr Atkinson at this month's meeting of the standing committee of attorneys-general to explain the benefits of the national system.

"It is clear that to progress these negotiations in some instances you have to look for the WIIFM (what's in it for me) factor and I will be sitting down to explain the bigger picture," Mr McClelland said.

He hoped to outline a broad range of "incentives or inducements that would ensure SA and the other states were all singing from the same song sheet". The federal Government, with the support of the Northern Territory, had placed the development of a national electronic conveyancing system on the SCAG agenda, Mr McClelland said. It was "regrettable" that state government officials had met last week to develop their own plans for e-conveyancing without including representatives of business users, he said. "If we are going to bed this down we need everyone on board the ship," he said, "rather than having some feeling they have been left at the wharf."


Mr McClelland said he had already had discussions on e-conveyancing and was considering a number of proposals about the future structure of the system. "A joint enterprise arrangement in which the states and territories, essentially -- and possibly the commonwealth -- have an interest would be a good thing. "To that extent I note there was a similar recommendation coming out of the meeting chaired by Bob Carr last week," he said. "So the reality is that all those involved are thinking in similar and constructive terms.


"My job is going to have to be to say to everyone: be careful that these discussions do not fragment and little rival blocs develop," Mr McClelland said. This month's meeting with his state counterparts would be an important opportunity to refocus the attention of the states on e-conveyancing, he said.


Chris Merritt | The Australian | 14 March 2008

Banks - register your complaints

Seriously or even not so seriously, what business would put its customers on hold for 20 minutes? What business, by the way, would tell its customers please fax me copies of the contract and transfer, then proceed to routinely lose those same documents, to the point where they must be re-faxed several times. What business would sell you a loan, yet is unable to book in the settlement til the actual day of settlement, at best the day before?

No prizes for guessing, its our major banks.

And the worst offender, by a long mile, is the Commonwealth Bank.

That's the treatment dished out to their customers and the customer's representatives. And this is business as usual for the majors. Seriously the banks and its executives would be aware of the problem. But what are they doing about it? Or do they just keep on getting away with it? Or are they just as frustrated as all of us.

The result of a survey and the responses from 50 conveyancers and lawyers is the banks treat their customers and mostly the customers' representatives with a universal disdain. Or my guess is the system's woes are so bad, the banks cannot recruit and retain staff with the experience and qualifications required for the job. The situation is worsening year by year, month by month as the banks' service is spiralling down. This too is having an impact on Law firms and Conveyancing companies recruiting and retaining qualified and experienced staff. It is not an industry that can readily attract or retain young individuals. Their attentions can easily be diverted to other more attractive industries. This is clearly unsustainable.

In a report that was far worse than I expected, the results of the survey make grim reading. Here's the link to the results of the survey. Thanks to those who responded to the survey. Your message is being passed along.

I cant quote everyone, so here is a response from Nick

"I am sick of wasting my time on things that should be in order, sick fixing things that the Bank clearly stuffs up. Sick of organizing and filling out bank forms (i.e. discharge authorities) which clearly is a bank document that should be completed by the Bank. Sick of answering questions for the Bank when they could pick up the phone and ask the client directly Sick of being charged reattendence settlement fees when the error is from the Bank Sick of Promises of call backs which hardly ever occur. My Time is precious and the Banks clearly waste my time for no other reason bar lack of care and incompetence."

20 plus years ago, two other markets, the share market and the money market, recognised and foresaw the problems with settlements and invoked technical solutions that reformed their industries. The solutions were all in the pre-internet days. The results transformed their industries. The solutions were put in place in recognition of what would happen if change was not instigated. It is remarkable to think the ASX introduced SEATS the day before the stock market crash in October 1987. This was followed by CHESS and what is called today T+3 (settlements within 3 days of the actual trade). Ditto Austraclear which reformed the money markets for trading bills and bonds. Austraclear is same day electronic trading and financial settlement. I recall the days very clearly as I ran the settlements side of a merchant bank in the 1980's. Trades were done in the morning and settlements were effected in the afternoon, with turnover regularly over $100M - physically drawing bank cheques, exchanging those cheques for the certificates for the bills and the bonds and switching securities. Austraclear changed all that overnight.

Fast forward 20 years, I would describe major banks' mortgage operations are run using Henry Fords 1910's conveyor belt assembly-line, updated with 1970's fax technology and overlayed with the latest 1980's centralised call centre. It sucks.

If the evidence already is not damning enough, I have created a Register of Complaints where you can report individual incidents on client files, estimated loss of time, cost to the firm and costs or losses to clients. Please bookmark this link to the Register of Complaints against Banks and start reporting on a regular basis. I only mentioned this to a colleague and right away she had a file where the bank on the other side had lost or misplaced the title. Lost time one hour plus. Cost to the firm $150.

Link 1 http://247legal.questionform.com/public/Report-a-Complaint-Bank-Settlements

Link 2 http://247legal.blogspot.com/2008/03/register-complaint-bank-settlements.html

Typical incidents you can report are

• Kept on Hold longer than 20 minutes
  
• Had to fax the same thing more than twice
  
• Mortgage / Loan Documents had to be redone
  
• Bank not in position to book 48 hours prior
  
• Title lost / misplaced
  
• Settlement delayed through a bank stuff up
  
• other:
  

Plus report on estimated -

• lost time,
  
• cost to the firm,
  
• loss to client for a bank stuff-up.
  

Industry reform across Australia is urgently needed.

Complaint Register. Register your complaints now or anytime and as they occur, perhaps using the time when you have been put on hold for 20 minutes or longer

Bookmark this link -

http://247legal.questionform.com/public/Report-a-Complaint-Bank-Settlements

The next step, you can help by -

1. reporting incidents on an ongoing basis; and
   
2. forwarding this email to colleagues and urging everyone to start reporting and registering complaints on a per file basis.
   

Our industry should be thriving, not struggling on a daily basis.

Campaigning for reform has started. Your responses and feedback will help shape the reform.

Brett Hayton
www.247legal.com.au

03 9557 3344

Action Group for Reform of property and mortgage settlements

Inside a Mortgage Settlements Area

David Pogue of NYT gave a report what it is like working as a tech-support call centre. It just reminds me of what it would be like working inside a Settlements Booking area for a major bank. What he describes follows -

"I've been making fun of bad tech-support reps. Actually, not just recently—they've been one of my favorite topics for years.

Deep inside, though, I have a lot of sympathy. By definition, the tech-support job entails talking all day to angry and unhappy people, which surely can't make you feel like skipping home from work. Meanwhile, at most tech-support centers, you have to fulfill an hourly quota of calls processed—so the job is stressful, too. No wonder the burnout rate is so high (and so many of these jobs are moving overseas).

So today, equal time. It's time to place half of the tech-support blame where it belongs: at the feet of Them. The Users.

Several years ago, I had the chance to visit a tech-support call center for one of the big computer companies. The technician gave me a second pair of headphones so I could listen in on his conversations with the hapless users.

I learned so much that day. I learned that all computer companies outsource tech support to dedicated call-center companies. I learned that the Users can be outrageously rude to these hapless tech-support reps, taking out their built-up frustration on somebody who had nothing to do with causing the problem.

And I learned that when they say, "Your call may be recorded for quality assurance purposes," that's only partly true. They also record your calls so they can pass around recordings of the funniest ones."

One the other hand, conveyancing staff working for lawyers and conveyancing companies, they are frustrated by the banks putting them on hold for 20 minutes and just generally having to deal with inexperienced bank staff, little wonder people are rude, They are sick of it,

Wanted: A More Digital Congress

When it comes to taking advantage of all the Internet has to offer, some media gurus say Congress is a little behind the curve.

Danny Glover, a tech expert at the Media Research Center put it this way: Most of the world is adapting to the so-called “Web 2.0″ phase of interactive, open source Internet programming. Congress is “maybe in a Web 0.5 phase.”

The consensus among most panelists as the Politics Online Conference in Washington seemed to be that Congress and the White House aren’t doing all they can — and should — be doing to incorporate average Americans into government.

Even in 2008, legislators still seem to be in the “early adopter phase” of developing their personal Web sites, said Mr. Glover, who added that the few congressmen who keep blogs only do it to seem “cool.” (Panelist Johanna Shelton of Google, however, gave props to Ben Nelson, senator of Nebraska, for keeping an online diary of his recent trip to Iraq.)

Some of the ideas tossed out during the break-out sessions were making congressional proceedings available on Web sites other than C-Span and making more government documents accessible to search engines. That’s doable with “a couple hours of coding,” Ms. Shelton said.

Another way to share content online with voters, said Sascha Meinrath of the New American Foundation, is including access to a program like Google Documents, which allows multiple users to edit the same document. The idea is that if congressmen put a preliminary draft of a bill in an open source program on their sites, then specialists out in their home districts could amend the language or add information that hadn’t been addressed for the legislator to consider.

“We should be tapping into that expertise,” Mr. Meinrath said. “Peer production is a massive untapped resource.”

Mr. Glover added: “We’re trying to make it easier to be involved and get more people involved.”

Both of those gentlemen acknowledged that politicians face a kind of Catch-22 when it comes to making their work more transparent. Statements and videos they post online can be taken out of context or re-edited.

One of the most successful examples of a government-run Web site is WhiteHouse.gov, said David Almacy, a former Internet director for George W. Bush’s White House. The site gets about 3 to 7 million page views per week, and provides policy information — and the popular Barney Cam holiday videos — to Internet surfers.

(To see how far the president’s official Web page has come, Mr. Almacy suggested looking at the original White House site under Bill Clinton, which can be accessed through the National Archives in all its cutting-edge-at-the-time glory.)

The most technologically advanced move made by the White House came this year, when the White House submitted its 2008 budget electronically for the first time, complete with President Bush’s e-signature.

But the president’s page is far from open-source. An “Ask the White House” feature has been running since 2005, but Mr. Almaty said “this president will never blog.”

And Ellen Miller of the Sunlight Foundation, which pushes for more government transparency, said the White House site is mostly full of P.R.-friendly statements.

As with any revolution, Mr. Meinrath said, some uncertainty lies in whether Congress will ever make use of all the Internet tools available to it. “That’s an open question,” he said.

Mr. Glover had a, well, slightly morbid outlook: Congress might not become more technology-forward “until older people are voted out of office or die.”

NYT | Ariel Alexovich | March 5, 08

Creating an effective national system is Rudd's challenge

Chris Merritt | The Australian | 7 March 2008

The state governments have given Kevin Rudd a stark choice.

The PM now has little choice but to shunt them aside and take the leading role in the push to establish a national system of electronic conveyancing.

The parochial states have shown themselves incapable of committing themselves to an e-conveyancing system that is truly national.

They have ignored key players in conveyancing - banks and solicitors - and designed their own framework as if the interests of bureaucrats were paramount.

If Rudd does nothing, the state governments look set to kill the only chance this country will have of making big savings in the cost of property transactions.

An opportunity to cut the cost of buying a home is on the line. Rudd offered new leadership. Now is his chance.

After being duchessed in secret by the Victorian Government for three days, representatives of every state agreed this week to embark on a course of action that is likely to increase the cost of conveyancing, not reduce it.

They agreed to establish a network of state-based electronic conveyancing systems modelled on the system being boycotted by banks and solicitors in Victoria.

The banks want a single national system so they can avoid the cost of dealing with separate state systems. They have been crystal clear about that: they want nothing to do with a federation of state systems.

To proceed down that track is akin to repeating the conflicting rail gauges that were a legacy of small thinking in colonial times.

The only winner from this development might be the Government of Victoria - which hosted this week's meeting. It has spent $40 million building an e-conveyancing system few people use.

But if every other state adopts the same state-based system, Victoria's problem suddenly becomes a problem shared by every other state.

The problems in Victoria are substantial. Conveyancing costs have risen and there is no sign of solicitors and banks ending their boycott. And that is the system that will now spread like measles around the nation.

< /end article >

To quote Shakespeare

Lear:
No, I will weep no more. In such a night
To shut me out? Pour on; I will endure.
In such a night as this? O Regan, Goneril!
Your old kind father, whose frank heart gave all—
O, that way madness lies; let me shun that;
No more of that.
King Lear Act 3, scene 4, 17–22

Vital parties denied e-conveyance input

THE push for a national electronic conveyancing system has been thrown into turmoil after state governments held a secret meeting aimed at sidelining lawyers, banks and conveyancers.

The meeting endorsed a plan for the states to adopt versions of Victoria's state-based electronic conveyancing system that would be customised to include differences between the states.

They also established a new "national entity" to determine how electronic conveyancing is to be implemented.

These decisions appear at odds with decisions that have already been taken by a joint government and business group that is responsible for building a national e-conveyancing system.

The move by the states prompted warnings from the Law Council of Australia and Australian Bankers Association, which have long demanded a single national system to eliminate the cost of dealing with separate state systems.

ABA director Ian Gilbert said unless the states took account of the needs of lawyers and others in the private sector, there could be a very small take-up rate for any system they developed.

"The systems have got to work for the people who will be getting the money to pay the jurisdictions for operating the system," Mr Gilbert said.

"I would have thought that was a pretty simple economic fact.

"If it does not meet private sector requirements, you may end up with a white elephant."

Mr Gilbert's warning reflects the the view of John Corcoran of the Law Council, which has also been demanding a national system. They both said they were not told of the meeting and learned of its outcome via a press release by the Victorian Government.

Mr Gilbert said the positive aspect of the Melbourne meeting was that Victoria appeared to have reached agreement on a process leading to the other states gaining access to the intellectual property underpinning Victoria's state-based e-conveyancing system.

"We have been asking for that for a long time," he said.

"But the concern is that this meeting went on to devise a governance model for the national electronic conveyancing system."

The structure outlined by the states would be dominated by state officials, which is at odds with a structure developed by a rival organisation that includes private sector representatives.

Mr Corcoran said the essential requirement for any e-conveyancing system was that it must be acceptable to key stakeholders.

He said the Victorian state-based system was not being used because of concerns by lawyers and bankers and it was "absolutely critical" other state governments took account of their views.

"We want a system that can be used by any lawyer in Australia dealing with any property in Australia," Mr Corcoran said.

The meeting between the states took place in the Melbourne offices of Mallesons Stephen Jaques and was chaired by former NSW premier Bob Carr, who attended the meeting at the invitation of the Victorian Government.

After the meeting, the Victorian Government announced an agreement had been reached on "a framework and structure by which Victoria could transfer the intellectual property" in its state-based e-conveyancing system to a new "national entity".

This entity would be owned by the state governments and a board of government officials would determine the strategy for implementing the new system. It would also determine "operational considerations".

While the statement issued after the meeting did not refer to private-sector users of e-conveyancing, it said "special interest committees" would be established and these would report to the board.

The new structure is at odds with a decision backed by private sector bodies and all state governments except Queensland at a meeting in Canberra last month.

That meeting was called by the steering committee of an organisation known as the National Electronic Conveyancing System. It agreed to give private sector representatives key roles in a project tream charged with building a national e-conveyancing system.

Despite the apparent clash between the organisations, the Victorian Government last night said that nothing agreed upon in Melbourne replaced existing agreements. That statement was from a spokesman for Environment Minister Gavin Jennings, who is responsible for Victoria's electronic conveyancing system, which is known as ECV.

"The meetings held over two days this week in Melbourne have been at officer level from all the jurisdictions, with the aim of establishing the basis of an agreement for all states and territories to have access to the ECV intellectual property," it said.

"The minister is pleased that agreement at this level has been reached. The detail of this agreement reached at officer level will now be considered at a higher level in all jurisdictions, before being taken forward.

"Nothing in the agreement reached this week supersedes or replaces existing agreements, as all jurisdictions remain committed to the establishment of a national EC system."

Chris Merritt, Legal affairs editor | March 07, 2008 | The Australian

Register a Complaint - Bank Settlements

UK - Mortgage Processor cuts jobs

Alliance & Leicester is axing 300 jobs following fall-out from the worldwide credit crunch.

Staff at its Wigan and Leicester mortgage processing departments and its Bootle back-office have been offered voluntary redundancy.

The bank - which employs 8,000 - said staff will have until the end of March to apply, with the jobs being cut from May.

A&L blamed the reduction in loans it expects in 2008.

Last week, the bank revealed a 30 per cent fall in profits and said it will be retreating from the mortgage market and focusing on savings and its growing current account business.

mirror.co.uk

Action Group - solving the crisis of settlements & banks

Australia's own mortgage crisis

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Its official - Major Banks Suck

Its official - the Settlements Operations of the major banks suck. Big time. We all knew that anyway.

Hey, it felt good to me that you shared the indignity of being put on hold for 20 minutes. The utter senselessness of sending a fax for it to disappear into the ether. We share the pain with you.

Here's the link to read the results of the survey, thus far. Results of the Survey and Responses

Some of the responses make you laugh and cry at the same time.

The survey is ongoing and the results are cumulative and tallied automatically Survey: Does dealing with the major banks suck?

Our representative bodies are aware of the issue. The LIV and the AIC. Pauline Barrow has being pushing the issue for the last 4 years. I have asked for a response from the LIV.

Myself, I am in favour of an independent action group to singularly push the issue and reform, which I am happy to spearhead with your support.

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Action Group - suggestions for names

First, any suggestions what to call the Action Group?

I will circulate your suggestions and then we can vote on the name

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The Survey - why the major banks suck

Second, spread the survey to your colleagues and encourage them to complete the survey.

• Send it to all your colleagues
• Send it to the practitioner on the other side of any current matter

The more names and the more responses the better - the number of responses so far is mid 30s. Lets see if we can score more than 100 - 1000!. We can even start to spread the campaign interstate, make it Australia wide.

When I get a response, I can add their name to the Action Group etc.

Or alternatively, email me with any names & email of persons that wish to be added to the mailing list

Here are the links you need to copy and paste into your emails

Results of the Survey and General Responses

Survey: Does dealing with the major banks suck?

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The Industry - their response

I circulated an email to several industry representatives to ask their response to the Survey and the results thus far. I am not holding my breath on the banks giving any meaningful response, but lets see. This campaign is only just beginning. We will stand united.

Perhaps we will need to engage counsel to advise on a class action. I feel the banks owe each and everyone of us compensation. Goddam it, half of us are lawyers, its our day job suing capricious injudicious unconsidered defendants. Make them pay. Make the executives of the banks co-defendants!

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The Media

I will be issuing a Media Release to The Australian, The Age and The Fin Review.

A good starting pointing is the media to bring attention to the problem that we all know is spiralling ever downward.

Copy of the Media Release to follow.

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Survey Results - thus far

The results of a Survey of Lawyers and Conveyancing are damning

• Commonwealth Bank Settlements Department is voted #1 biggest loser
• The average time on hold is 20 minutes
• Faxes routinely get lost and have to be faxed more than twice (fax heaven or to insiders the blob)
  
• Clients miss settlements through bank stuff-ups
• The service of banks settlements is worsening by a large margin

What the highlight of the survey was not the results, they were not unexpected, it was the opportunity for lawyers and conveyancers to vent their frustrations in carrying out their daily tasks of dealing with the banks, day in day out. Here's a few examples.

Soozi

the bank's don't CARE.

they do not have to speak to the clients or be responsible for the delays in settlement, often caused by the bank. they are just names to the banks. to us, they are clients who we speak with, who are a family with young children, elderly couples, people who need assistance. Care Factor Zero by the banks. So Frustrating. Put on more staff, more telephone assistance, and people who KNOW what they are doing !


Nick

They're all the same.The bottom line is that Banks are reactive not proactive, and control the lending/settlements area like an indian call centre where, if a box is not ticked in sequential mode, it goes in the too hard basket of some uneducated pimply school leaver who has had no training. Do they get their staff from the CES because they are subsidised by the Government? Why do they always work to the lowest common denominator? Money! Service......none. Customers are numbers like prisoners in a nazi concentration camp.


Jo

Frustration with all banks but particularly CBA and ANZ. CBA has got progressively worse with waiting times of up to an hour, inability to book settlements sometimes until the day of settlement with no one willing to take responsibility and no one able to tell why such a delay. ANZ Discharges is a total disgrace with rude staff who do not know what they are doing and continually tell you things that never eventuate. They will only settle with their original Discharge Authority signed by the vendor but will not provide you with the Authority until a couple of days before settlement even though they've had the request for anywhere up to three months and despite continual faxes and phone calls and agreement that the service is disgraceful with no action taken until they can be bothered. AND don't get me started on Section 27 requests. This seems to be right across the board with all banks, even though you may have given them months notice, they do not start working on files until a couple of days prior to settlement causing us all sorts of problems with organising settlements and getting details. It seems to be that all banks have cut their staff so much that they give no service then panic, rehire and have to retrain staff only to cut the staff again and so the cycle goes. I really don't give a stuff if they're short staffed and under-trained. This is no excuse, they need to do something about it - imagine if we treated our clients this way - WE'D BE OUT OF BUSINESS. In my many years of doing conveyancing I have never experienced such incompetence, lack of accountability and poor service - they've taken it to a new level!!

Graeme

Sick of banks (that just says it all)

The responses are just a sample. Click here for more responses

The disgust for the situation is universal.

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How do Settlements Operations work?

In summary the major banks' mortgage operations are run using Henry Fords 1910's conveyor belt assembly-line, updated with 1970's fax technology and overlayed with the latest 1980's centralised call centre.

No single bank employee has responsibility for a client file, it is a collective responsibility, meaning no responsibility. Emailing is not an option. Direct dialling - what's that? Book online - well that's a new thought - why didn't we think of that? You just cant do it. Again, its not an option.

source - wikipedia

Lawyers and conveyancers are all professionals and deserve an equal amount of respect. The executives of the banks have a lot to answer for decline in service levels that has brought the industry to its knees. The banks' attitude is totally cost driven. I would not be surprised if their next step is to outsource the lot to India, such is their we don't care attitude

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Problems demand Answers and Solutions

There is no doubt the major banks have created the problem in the pursuit of short term efficiencies and cost savings. Having created the problem, the problem is now out of control. As much as the short term answer is more staff, the banks have the greater issue of staff retention. Recruiting, training and retaining experienced settlement staff is now an industry wide worry. Only 2 months ago, the Commonwealth Bank (Melbourne office) had to literally second and conscript staff to work in the settlements area. Not since the Vietnam War have we seen conscription. Increased staffing levels is just a short term panacea. But it appears no-one wants a career working under such demoralising conditions.

Reform is demanded.

The solution. It has to be industry wide, it has to be national and it has to be a technical solution. The securities industry and the money markets recognised this problem over 20 years ago and collectively enacted just that - the results were SEATS, CHESS & Austraclear, all world class solutions.

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Links

Results of the Survey and General Responses

Survey: Does dealing with the major banks suck?

247legal Blog - issues covering conveyancing

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For further information

Brett Hayton
Property & Conveyancing Lawyer
Hayton Kosky Lawyers

03 9557 3344
bretthayton at gmail.com

247legal.com.au #1 for digital conveyancing

on behalf of all disgruntled lawyers and conveyancers that are fed up with the banks

We demand national action and national solutions

Land Title Certificates abolished in UK

Continuing the series in which our Clinic experts provide a guide to those thorny issues that can trip up the unwary. This week, David Fleming on why we no longer need title deeds

What are title deeds?

Historically, title deeds were the pieces of paper that showed who owned a property. In the case of unregistered land, they have always consisted of conveyances and other documents showing the transfer of the property from one owner to another. Most land is registered now and the deeds used to be either a land certificate or, in the case of property with a mortgage, a charge certificate with the mortgage deed bound into it. Both contained a copy of the entries at the Land Registry showing the property (together with a plan), the name of the owner and details of mortgages and other charges. That was until October 2003, when everything changed.
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What happened then?

The Land Registration Act 2002 came into force and abolished land and charge certificates. Now all the owner receives when a property changes hands or is mortgaged is a copy of the entries held at the Land Registry. And often the only document handed over at the completion of a sale is a form of transfer signed and witnessed by the seller in favour of the buyer.

Why all these changes?

It is the first step in a grand scheme for electronic conveyancing, which will eventually mean no more paper transfers, mortgages and so on. It is unclear exactly how this will work in practice, but clearly there will have to be some form of "electronic signature" whereby the seller's solicitor confirms that the property has been transferred to the buyer. One major advantage to the new system will be a facility for all the parties in a chain of transactions to see the progress of the chain online rather than wait for their solicitors to get in touch.

So does it matter if my lawyer has lost my deeds?

No. But if you want something for your files, you can obtain a copy of the title register and title plan for £3 each (www.landregisteronline.gov.uk). And, when you buy a house, keep the copy of the register entries, which your solicitor should send you on completion, just in case disaster strikes and the Land Registry's electronic records become corrupted (I would stress that this has never yet happened to my knowledge, and I am sure the Land Registry has all the necessary back-up systems).

# David Fleming is head of property litigation at William Heath & Co

The Telegraph.co.uk

Property tax glitch hits buyers

VICTORIAN home buyers could be forced to pay an extra $6.2 million in property taxes because of the bungled introduction of a $40 million electronic conveyancing system.

Builders and lawyers are furious about a move by the Government to boost taxes for paper-based conveyancing by as much as 32%.

The decision to increase fees for all paper lodgements by $15.50 in November last year was supposed to trigger a speedy shift to a new, more efficient electronic system.

But banks and lawyers are refusing to accept the new system — which has also been hampered by software glitches — amid concern about legal ramifications and potential liabilities for solicitors who use it.

That means all transactions are still being done using the paper system, leading to windfall tax gains for the State Government of $15.50 each time one is lodged.

Conveyancing is the sometimes complex process of transferring legal ownership of a property from one person to another. With an estimated 400,000 conveyancing transactions a year in Victoria, the gain for the State Government could be as much $6.2 million.

In a strongly worded letter to Land Victoria, Master Builders executive director Brian Welch said it was a "thinly veiled attempt to collect more taxation from the building industry".

The letter urges the State Government to remove the fee differential, saying it represented another unnecessary tax for the industry. "Taxes and charges on the building industry add 30% to the cost of a new house and land, with 53% of these taxes going directly to the State Government," the letter says.

Asked about the issue in State Parliament, the minister responsible for the new system, Gavin Jennings, conceded there had been some "teething problems" but said there would be no move to lower the fees. He said Victoria's aim was to establish a national conveyancing system to solve the problems.

"I am confident that despite some teething problems … I think at the end of the day Victorian people will be well pleased that we will be at the heart of a national electronic conveyancing system," Mr Jennings said.

In another letter to Land Victoria, Law Institute of Victoria chief executive Michael Brett Young said the fee increase was an unjust financial imposition, given it had been shunned by major banks and lawyers.

State Opposition scrutiny-of-government spokesman David Davis said families were being forced to pay for a Government blunder.

"The Government has introduced increases of up to 30% to encourage people to use its botched electronic system, essentially ripping off families who have no realistic choice but pay," Mr Davis said.

Under the changes, charges for paper lodgement of transfer of sale documents increased to $112.50 from $97; charges for registering mortgages increased to $92.40 from $76.90; and charges for registering a variation of mortgage increased to $64, from $48.50.

The Age
Josh Gordon
February 28, 2008

Survey: Does dealing with the major banks suck?

Sir Robert Richard Torrens - father of the Torrens system

SIR ROBERT RICHARD TORRENS (1814-1884), British colonial statesman, was born at Cork, Ireland, in 1814, and educated at Trinity College, Dublin. He went to South Australia in 1840, and was appointed collector of customs. He was an official member of the first legislative council and in 1852 was treasurer and registrar-general. When responsible government was established he was elected as a representative for Adelaide and became a member of the first ministry. In 1857 he introduced his famous Real Property Act, the principle of which consists of conveyance by registration and certificate instead of deeds. The system was rapidly adopted in the other colonies and elsewhere, and was expounded by the author during a visit to the United Kingdom in 1862-1864. After leaving South Australia, Sir R. R. Torrens represented Cambridge in the House of Commons from 1868 to 1874; in 1872 he was knighted. He was the author of works on the effect of the gold discoveries on the currency, and other subjects. He died on the 31st of August 1884.




Encyclopdia Brittanica - 1911 edition

Land Registration - 1911

A historical perspective of land registration

LAND REGISTRATION, a legal process connected with the transfer of landed property, comprising two forms - registration of deeds and registration of title, which may be best described as a species of machinery for assisting a purchaser or mortgagee in his inquiries as to his vendor's or mortgagor's title previously to completing his dealing, and for securing his own position afterwards. The expediency of making inquiry into the vendor's title before completing a purchase of land (and the case of a mortgage is precisely similar) is obvious. In the case of goods possession may ordinarily be relied on as proof of full ownership;. in the case of land, the person in ostensible possession is very seldom the owner, being usually only a tenant, paying rent to someone else. Even the person to whom the rent is paid is in many cases - probably, in England, in most cases - not the full owner, but only a life owner, or a trustee, whose powers of disposing of the property are of a strictly limited nature. Again, goods are very seldom the subject of a mortgage, whereas land has from time immemorial been the frequent subject of this class of transaction. Evidently, therefore, some sort of inquiry is necessary to enable a purchaser to obtain certainty that the land for which he pays full price is not subject to an unknown mortgage or charge which, if left undiscovered; might afterwards deprive him of a large part or even the whole of its value. Again, the probability of serious consequences to the purchaser ensuing from a mistake as to title is infinitely greater in the case of land than in the case of goods. Before the rightful owner can recover misappropriated goods, he has to find out where they are. This is usually a matter of considerable difficulty. By the time they have reached the hands of a bona fide purchaser all chance of their recovery by the true owner is practically at an end. But with land the case is far otherwise. A dispossessed rightful owner never has any difficulty in tracing his property, for it is immovable. All he has to do is to bring an action for ejectment against the person in possession. For these reasons, among others, any attempt to deal with land on the simple and unsuspecting principles which obtain in regard to goods would be fraught with grave risks.

Apart from very early and primitive social conditions, there appear to be only two ways in which the required certainty as to title to land can be obtained. Either the purchaser must satisfy himself, by an exhaustive scrutiny and review of all the deeds, wills, marriages, heirships and other documents and events by which the property has been conveyed, mortgaged, leased, devised or transmitted during a considerable period of time, that no loophole exists whereby an adverse claim can enter or be made good - this is called the system of private investigation of title - or the government must keep an authoritative list or register of the properties within its jurisdiction, together with the names of the owners and particulars of the encumbrances in each case, and must protect purchasers and others dealing with land, on the faith of this register, from all adverse claims. This second system is called Registration of Title. To these two alternatives may perhaps be added a third, of very recent growth - Insurance of Title. This is largely used in the United States. But it is in reality only a phase of the system of private investigation. The insurance company investigates the title, and charges the purchaser a premium to cover the expense and the risk of error. Registration of deeds is an adjunct of the system of private investigation, and, except in England, is a practically invariable feature of it. It consists in the establishment of public offices in which all documents affecting land are to be recorded - partly to preserve them in a readily accessible place, partly to prevent the possibility of any material deed or document being dishonestly concealed by a vendor. Where registration is effected by depositing a full copy of the deed, it also renders the subsequent falsification of the original document dangerous. Registration of deeds does not (except perhaps to a certain extent indirectly) cheapen or simplify the process of investigation - the formalities at the registry add something to the trouble and cost incurred - but it prevents the particular classes of fraud mentioned.

The history of land registration follows, as a general rule, a fairly uniform course of development. In very early times, and in small and simple communities, the difficulty afterwards found in establishing title to land does not arise, owing to the primitive habit of attaching ceremony and publicity to all dealings. The parties meet on the land, with witnesses; symbolical acts (such as handing over a piece of earth, or the bough of a tree) are performed; and a set form of words is spoken, expressive of the intention to convey. By this means the ownership of each estate in the community becomes to a certain extent a matter of common knowledge, rendering fraud and mistake difficult. But this method leaves a good deal to be desired in point of security. Witnesses die, and memory is uncertain; and one of the earliest improvements consists in the establishment of a sort of public record kept by the magistrate, lord or other local authority, containing a series of contemporary notes of the effect of the various transactions that take place. This book becomes the general title-deed of the whole community, and as long as transactions remain simple, and not too numerous, the results appear to be satisfactory. Of this character are the Manorial Court Rolls, which were in the middle ages the great authorities on title, both in England and on the continent. The entries in them in early times were made in a very few words. The date, the names of the parties, the name or short verbal description of the land, the nature of the transaction, are all that appear. In the land registry at Vienna there is a continuous series of registers of this kind going back to 1368, in Prague to 1377, in Munich to 1440. No doubt there are extant (though in a less easily accessible form) manorial records in England of equal or greater antiquity. This may be considered the first stage in the history of Land Registration. It can hardly be said to be in active operation at the present day in any civilized country - in the sense in which that term is usually understood. Where dealings become more numerous and complicated, written instruments are required to express the intentions of the parties, and afterwards to supply evidence of the landowner's title. It appears, too, that as a general rule the public books already described continue to be used, notwithstanding this change; only (as would be expected) the entries in them, once plain and simple, either grow into full copies of the long and intricate deeds, or consist of mere notes stating that such and such deeds have been executed, leaving the persons interested to inquire for the originals, in whose custody soever they may be found. This system, which may be regarded as the second stage in the history of land registration, is called Registration of Deeds. It prevails in France, Belgium, parts of Switzerland, in Italy, Spain, India, in almost all the British colonies (except Australasia and Canada), in most of the states of the American Union, in the South American republics, in Scotland and Ireland, and in the English counties of Yorkshire and Middlesex. Where it exists, there is generally a law to the effect that in case of dispute a registered deed shall prevail over an unregistered one. The practical effect is that a purchaser can, by searching the register, find out exactly what deeds he ought to inquire for, and receives an assurance that if, after completion, he registers his own conveyance, no other deeds - even if they exist - will prevail against him.

The expenses and delays, not to mention the occasional actual losses of property through fraud or mistake, attendant on the system of making every purchaser responsible for the due examination of his vendor's title - whether or not assisted by registration of deeds - have induced several governments to establish the more perfect system of Registration of Title, which consists in collecting the transactions affecting each separate estate under a separate head, keeping an accurate account of the parcels of which each such estate is composed, and summarizing authoritatively, as each fresh transaction occurs, the subsisting rights of all parties in relation to the land itself. This system prevails in Germany, Austria, Hungary, parts of Switzerland, the Australasian colonies, nearly the whole of Canada, some of the states of the American Union, to a certain extent in Ireland, and is in course of establishment in England and Wales. The Register consists of three portions: - (1) The description of the land, usually, but not necessarily, accompanied by a reference to a map; (2) the ownership, giving the name and address of the person who can sell and dispose of the land; and (3) the encumbrances, in their order of priority, and the names of the persons for the time being entitled to them. When any fresh transaction takes place the instrument effecting it is produced, and the proper alterations in, or additions to, the register are made: if it be a sale, the name of the vendor is cancelled from the register, and that of the purchaser is entered instead; if it be a mortgage, it is added to the list of encumbrances; if a discharge, the encumbrance discharged is cancelled; if it is a sale of part of the land, the original description is modified or the plan is marked to show the piece conveyed, while a new description or plan is made and a new register is opened for the detached parcel. In the English and Australian registries a "land certificate" is also issued to the landowner containing copies of the register and of the plan. This certificate takes the place more or less of the old documents of title. On a sale, the process is as follows: The vendor first of all produces to the purchaser his land certificate, or gives him the number of his title and an authority to inspect the register. In Austria and in some colonial registries this is not necessary, the register being open to public inspection, which in England is not the case. The purchaser, on inspecting this, can easily see for himself whether the land he wishes to buy is comprised in the registered description or plan, whether the vendor's name appears on the register as the owner of the land, and whether there are any encumbrances or other burdens registered as affecting it. If there are encumbrances, the register states their amount and who are entitled to them. The purchaser then usually' prepares a conveyance or transfer of the land (generally in a short printed form issued by the registry), and the vendor executes it in exchange for the purchase money. If there are mortgages, he pays them off to the persons named in the register as their owners, and they concur in a discharge. He then presents the executed instruments at the registry, and is entered as owner of the land instead of the vendor, the mortgages, if any, being cancelled. Where "land certificates" are used (as in England and Australia), a new land certificate is issued to the purchaser showing the existing state of the register and containing a copy of the registered plan of the land. The above is only a brief outline of the processes employed. For further information as to practical details reference may be made to the treatises mentioned at the end of this article.

Source: 1911 Encyclopedia

NECS - THE NATIONAL PROJECT TEAM

A Stakeholder Working Group meeting was held in Canberra on 15 February 2008 to develop a consensus among stakeholders on arrangements for a National Project Team (NPT) to advance definition of the National Electronic Conveyancing System (NECS)

The meeting had more than 50 stakeholder representatives and industry participants present and after introductions was addressed by Ian Gilbert, Director of Australian Bankers Association (ABA) and John Corcoran, President‐elect of the Law Council of Australia (LCA) who both provided industry perspectives on the importance of the meeting.

Ian Gilbert confirmed that the banks fully support a NECS which would provide valued microeconomic reform. He emphasised that a pre‐condition for success was the co‐operation of jurisdictions and the private sector in the realisation of a single national system capable of servicing stakeholder needs in all jurisdictions. He made it clear that NECS is much more than a computer system, that the business practices supporting it are equally important and that the banks need a fully consultative process for its development otherwise their business case for participation will fail.

John Corcoran confirmed that lawyers want a system that can operate in all jurisdictions; integrates with the technology in legal practices; suits all firms, large and small; is efficient reliable and robust; and is fair in its distribution of risk. He advised the meeting that, from the perspective of the legal profession, a federation of separate jurisdiction systems is unacceptable and the system must be a
single, national, multi‐jurisdiction system supported by all major stakeholders. He also emphasised the importance of adequate funding for the work of establishing NECS.

Simon Libbis, Executive Director of the National Office, presented the background to the meeting, including the unanimous decision at the last National Steering Committee to establish the NPT and to hold an open meeting of stakeholders to reach a consensus on arrangements. He emphasised that the Steering Committee intended that the team work within the context of the agreed National Business Model and he presented a number of suggested arrangements as a basis for the meeting’s discussion. He advised that the arrangements agreed upon would be presented to the Steering Committee for confirmation before any substantive work got underway.

Under the chairmanship of Richard Glenn, the Australian Government representative on the National Steering Committee, the meeting reached consensus on the following outcomes -

1. The NPT is to be responsible to the National Steering Committee but work through the National Office in providing its advice.
2. The NPT is to consist of eight permanent and up to six casual members.
3. The permanent members are to be:
• 1 representative of banks nominated by the ABA
• 1 representative of legal practitioners nominated by the LCA
• 1 representative of licensed conveyancers nominated by the AIC
• 1 representative of land registries nominated by the jurisdictions
• 1 representative of non‐bank lenders nominated by the MFAA
• 1 representative of independent mortgage processors nominated by NECO
• 1 representative of information brokers nominated by IBLSA
• 1 representative of revenue offices nominated by the Revenue Commissioners
4. The casual members are to be appointed as required by the National Steering Committee to provide additional stakeholder representation or specialist advice.
5. Current members of the National Steering Committee are to be ineligible for NPT membership so as to avoid any conflict in the governance of the team’s arrangements.
6. The team is to meet face‐to‐face every six weeks, or as the need arises, with video conferencing if necessary and available, and in between times exchange views by email and teleconferences. Meeting locations are to best suit team members. The National Office is to provide a non‐voting chair for meetings and record determinations. Team members are to meet their own costs of attending meetings and the National Office is to meet the cost of arranging and holding meetings.
7. Team members are to be encouraged to tap into the resources of their respective organisations, profession and stakeholder group for assistance and guidance, and are to be able to provide third‐party advice for team consideration provided it is of good standing and supported.
8. The team is to consider issue papers prepared by the National Office and make determinations that advance the development of NECS within the context of the National Business Model. The team’s determinations are to be based on a simple majority consensus and adopted automatically into the National Roadmap when consistent with it. Contentious determinations are to be referred by the National Office to the National Steering Committee for resolution.
9. All determinations are to be referred to the National Steering Committee for confirmation or resolution.
10. All issue papers considered and all determinations made are to be published on the NECS website for unrestricted access.
11. The team’s initial priorities are to be in order of immediate importance:
• System functions and features
• System performance characteristics
• Supporting business practices
• Risk management regime (including a compensation fund)
• Legislative framework
• Implementation planning (including take‐up initiatives and transition arrangements).

Families skip meals to pay rent

RISING rents are forcing thousands of Australians to skip meals and deny their children school excursions, according to new research.

This came as another study showed there will be a massive increase in the number of renters over the next 40 years as housing becomes increasingly unaffordable to low-income earners.

Research by the Australian Housing and Urban Research Institute, based on surveys and interviews with 1400 renter households and 400 recent home purchasers, found that 26% of low-income renters surveyed sometimes go without food and 42% can't afford school excursions. Forty-seven per cent said that, even with improved income, rents would still be too high.

"Despite the government obsession with home ownership, private rental is the problem sector," institute researcher Terry Burke told the National Housing Conference in Sydney.

Many home owners pay their mortgage by taking second jobs, but Professor Burke said: "Any economic slowdown means they could lose those jobs and then you have thousands who are going to be in trouble. I suspect we are approaching that situation."

He criticised negative gearing, the first home owners' grant, capital gains tax and rent assistance as measures that add to demand for housing without boosting supply, but said he doubted the Federal Government would drop the policies.

A separate study presented at the conference, headed by housing analyst Judith Yates of Sydney University, projects that over the next 40 years, the number of households will increase by 50%, but the number of renters will almost double.

"In the future, as in the past, the majority of Australians will have affordable, secure housing over their lives," the study said. "(But) it will be increasingly difficult for low and moderate-income households who have deferred home purchase to become home owners. "The number of lower-income households in housing stress in the private rental market is expected to increase by 120%."

The study points out that home ownership rates are already falling among younger households. Between 1981 and 2006, the proportion of householders aged 35 to 44 who do not own their home has risen from 25% to 32%. The proportion aged 25 to 34 who are renting has swollen from 39% to 49%.

The Housing Industry Association forecast that in 2007-08 there would be hardly any growth in housing starts.

Housing Industry Association director Chris Lamont said housing starts had stalled at a level providing about 20,000 fewer homes a year than Australia needed. New rate rises would further restrict supply, putting more pressure on house prices and rents.

The Age
Sunanda Creagh and Tim Colebatch
February 22, 2008

The Democratic Nomination - EC Vic or NECS?

If the race for the democratic nomination was a choice between EC Vic and NECS, the lobbying for delegates is intense. Victoria has bagged Queensland, Bendigo Bank and MECU as delegates. NECS can count on NSW, the Law Council of Australia and the Australian Bankers Association. On Friday 15 February NECS launched the National Project Team being a body made up of industry representatives from every sector and reps standing in for the jurisdictions. Banks, Non-banks, Lawyers, Conveyancers, Mortgage Processors, Information Brokers, Jurisdictions and others will all have hand picked reps to start the process to define the shape and framework of the National Electronic Conveyancing System. Priorities and time lines will be set by the National Project team to report upline to the National Steering Committee. If there was one message in the background, that message is National, underscored and in bold. The day was chaired by Richard Glenn who is from the Commonwealth Government Attorney-General's Department, assistant secretary. I wouldn't go as far to say the conference was Super Tuesday, but it was close. The banks are the super-delegates for the casting of votes. Yesterday there was unquestionable support for the national process. How long will EC Vic fight the fight, we dont know but their star is waning and I cant see them outgunning NECS, despite all the problems of funding and ownership, and counter arguments. It is anyone's guess when we will see EC rolled into NECS. IP and all. This is not a quote, this is just speculation. If anyone wants to leave comment, please do

I expect NECS will shortly make an announcement on the make up of the National Project Team (NPT) as well as the priorities that will be set by the industry representatives.

There was several calls from the floor of the conference, that the NPT priorities need to give clear attention and address the issues of take up, traction, transition and conversion as well as a rigorous cost / benefit analysis. I agree these are important fundamental issues, which I would believe were not given to the design and implementation of EC Vic.Take up and transition are the core to the design of NECS. Lets not forget the consumer. Giving focus and attention to the client should be a very high and guiding principle within the system. What is to be the starting point? These will be interesting and challenging questions for the NPT.

Home buyers hurt by ECV delays

Chris Merritt | February 15, 2008 | The Australian

THE Victorian Government has forced the state's home buyers to pay hundreds of thousands of dollars in extra government fees because disputes have hobbled its $40 million electronic conveyancing system.

Home buyers have been paying extra charges since November because the Government has been unable to settle disputes affecting its relatively cheap electronic conveyancing system (ECV).

As a result, thousands of people who have bought and sold property since November have had no alternative but to use the old paper-based conveyancing system that has been hit by government fee increases of up to 32 per cent.

The Government imposed those increases in November to encourage a quick take-up of the electronic system. But it has refused to remove the fee increases despite its inability to resolve disputes with key players in the conveyancing industry that have limited the take-up of the new system.

Those disputes, which have been dragging on since last year, have led to a boycott of ECV by the major banks and most of the state's solicitors.

But they have also led to a windfall in conveyancing fee income for the state Government from the old paper-based system.

The Australian Institute of Conveyancers said the Government had been receiving about $20 more for each document filed under the old system than it would have received under ECV.

"There would be thousands of these documents filed each week," said Australian Institute of Conveyancers Victorian chief executive Jill Ludwell.

The blow-out in conveyancing fees has alienated the remaining key players in the conveyancing industry who were not already at odds with the state Government over ECV.

The Australian Institute of Conveyancers, the Law Institute of Victoria and the Victorian arm of the Master Builders Association all called this week for the fee increases on paper-based conveyancing to be abandoned.

The other key players in conveyancing -- the major banks -- were already involved in one of the two disputes with the Government that are affecting ECV.

The big banks withdrew their support from ECV last year until they were satisfied that Victoria was committed to establishing a single national system of electronic conveyancing instead of a series of state-based systems.

In November the Victorian minister responsible for ECV, Gavin Jennings, was a key player in the establishment of a high-powered committee of state government officials aimed at working towards a national e-conveyancing system.

The other dispute affecting ECV involves the Legal Practitioners Liability Committee, the organisation that provides professional indemnity insurance for Victoria's solicitors.

The committee had not been consulted about ECV until relatively late in the system's development. The Government has not yet been able to ease the committee's concerns about the potential liability of solicitors who take part in the system.

Without the committee's sign-off, the Law Institute of Victoria has been unable to recommend that solicitors take part in the system. However, the Rudd Government has now intervened in the dispute and is attempting to broker a solution that could address the concerns of the big banks (see accompanying report).

The state opposition has also taken an interest in the affair.

Shadow Attorney-General Robert Clark said that if the problems afflicting ECV could not be resolved by government officials, Attorney-General Rob Hulls needed to take a direct role in talks with the banks and the Law Institute. "This needs to be thrashed out. You cannot have a system introduced by the Government that these key and respected organisations believe is unsatisfactory," Mr Clark said.

"Until the new system is up and running, the consumer is paying through the nose for the old paper-based system," he said.

He endorsed the call from the conveyancing industry for the fee increases to be wound back.

Before unveiling the latest stage of ECV in November, the Government promised it would result in cost savings on property transactions of up to $395.

However, the Australian Institute of Conveyancers said the net impact of ECV and its associated disputes had increased the cost of conveyancing and hurt the public. "The public is being penalised because the electronic system in Victoria cannot get up and running," said the AIC's Jill Ludwell.

Body: She said the fee increases for paper-based conveyancing would have caused far less disruption had they been introduced once ECV was being widely used. "The industry is fed up with all the bickering," Ms Ludwell said.

Figures assembled by the Master Builders Association show the cost of filing a traditional property transfer, after a sale, rose by 16 per cent in November. Government fees on other paper-based documents rose by between 20.2 and 32 per cent.

The Law Institute warned the Government on November 1 that ECV, at least in its early stages, was unlikely to be widely used. LIV chief executive Michael Brett Young wrote to Land Victoria saying the fee hikes were being introduced even before the latest stage of ECV was due to be launched on November 16. He urged Land Victoria not to introduce the new fees until there was wider participation in ECV.

"It is an unjust financial imposition upon the end-users of Land Victoria's registration system to bear additional costs associated with paper-based transactions," Mr Brett Young wrote.

On September 3, the Master Builders had sent Land Victoria a similar warning. Executive director Brian Welch wrote that the state Government's over-reliance on building industry taxes was undermining housing affordability, discouraging investment and reducing employment opportunities. "Taxes and charges on the building industry add 30 per cent to the cost of a new house and land, with 53 per cent of these taxes going directly to the state Government," Mr Welch wrote.

Mr Welch told The Australian that ECV was a good idea that had been spoiled by bad execution. "What we need is a transition and I suspect that was never considered," he said.

Mr Brett Young said electronic conveyancing was a worthwhile initiative but to work there needed to be one system across the nation. He said the best way to ensure a quick take-up of ECV would be to greatly reduce the cost of online filing while returning the fee scale for paper-based conveyancing to its original level.

He believed a benefit of having Labor governments in office in Canberra and the states was that it increased the likelihood of achieving a national approach to electronic conveyancing.

A spokesman for Victorian Environment Minister Gavin Jennings said the state's electronic conveyancing system had become "fully operational" late last year.

"The electronic conveyancing system will provide savings of up to $395 per for party settlement, and more than $70 million of annual savings to Victorian industry and the community by 2012," the spokesman said. "We are continuing to work with our industry partners and commonwealth, states and territory colleagues toward the development of a national EC system."

Conveyancing back on the pollies' agenda

Chris Merrit, The Australian 15 Feb

THE federal Government is taking direct action aimed at reinvigorating the push for a single national electronic conveyancing system.

The Government believes the project is one of the key initiatives that could help reduce the cost of housing.

It is also seen as a way in which the Government could implement its goal of cutting red tape and increasing federal-state co-operation.

One of the top officials in the Attorney-General's Department, assistant secretary Richard Glenn, will be chairing a crucial meeting in Canberra today of the conveyancing industry's key players.

Mr Glenn has been heavily involved in an inter-governmental project aimed at establishing a national register for personal property securities.

Today's meeting will be attended by representatives of most state law societies, non-lawyer conveyancers, federal Treasury, the major banks and Australian Government Information Management Office.

It is aimed at forming a national project team to build the national system.

That team could help to eliminate the focus on inter-governmental rivalry that has slowed progress on the project.

A successful outcome from today's meeting is expected to help ease some of the concerns that are behind the boycott by the major banks of Victoria's state-based system.

The big banks have withdrawn their support from the Victorian system because they want to deal with one national system instead of a series of state-based systems.

As well as chairing today's meeting, the Attorney-General's Department has joined the steering committee that is overseeing the development of the national e-conveyancing system. Federal Attorney-General Robert McClelland said progress on establishing a national system had stalled under the Howard government.

He will be raising the issue with his state and territory counterparts when they meet next month.

The Government is also examining the option of including electronic conveyancing on the agenda for the Council of Australian Governments.

The COAG business regulation and competition working group will consider the push for a national system at its meeting this month.

Finance Minister Lindsay Tanner said the Government had asked the states and territories to consider "whether a national system could be placed on the COAG agenda with an agreed implementation timeline".

"A national electronic conveyancing system is an example of harnessing technology to reduce the costs of doing business," he said.

The proposed national system is not intended to replace the land registries that are run by state and territory governments.

Instead, it would enable parties involved in property transactions to deal electronically through a single national portal.

The Australian Bankers Association endorsed the proposed establishment of a national project team.

ABA director Ian Gilbert said the intention was to assemble a team with the technical know-how to take the national electronic conveyancing project to the next stage.

Transfer of Land (Electronic Transactions) Act 2004

EC's legislative framework stems from the amendments to the Transfer of Land Act 1958. In reviewing the functionality of EC many of its features are a direct result of the changes mandated. The summary of changes are -

PART 2—AMENDMENTS TO THE TRANSFER OF LAND ACT 1958
3. Definitions
4. New section 27AB inserted
27AB. Verification of identity
5. Instruments in duplicate and triplicate
6. New Part IIIA inserted
PART IIIA—ELECTRONIC INSTRUMENTS
44A. Restriction on lodgement of electronic instruments
44B. Registrar may provide electronic lodgement network
44C. Agents for lodging electronic instruments must be eligible persons
44D. Powers of Registrar
44E. Duty of Registrar in relation to priority of electronic instruments
44F. Notification of registration
44G. Evidence of registration of electronic instrument
44H. Electronic lodgement network malfunction
44I. Destruction of certificate of title
44J. Registrar may require production of documents
44K. Registrar may specify matters to be certified
44L. Evidence of electronic instruments
44M. Electronic certification of electronic instrument
44N. Registrar may deal exclusively with responsible party

Link to a word version of the Act. These changes are now formally coded as part of the Transfer of Land Act 1958

Why are houses prices unaffordable?

I have an alternative theory why housing is so unaffordable. One is Keynsian economic theory, demand exceeds supply, prices rise. If demand is high and supply is low, prices will rise and the converse applies. Victoria has had a rising population which has added to the demand side of the equation.

Monetary economics applies as well. If interest rates drop, as they have or did for quite a while, prices rise. Interest rates have been on the rise for a number of consecutive quarters but we have still seen prices rising. This is an anomaly, so there must be another factor.

There is a third factor. And that is the government's role in the property sector. Taxation.

1. State stamp duty
   
2. Commonwealth Capital Gains Tax
   
3. GST

Each of these taxes are either an ingoing tax or exit tax, and each will make a significant impact on peoples decision to buy, sell or hold.
The first, being stamp duty, is the most insinuous tax. The second affects only investors. The third impacts the new building sector the greatest.

Stamp duty, historically, taxed mums and dads on the purchase of a home at a rate of 2%. That now is effectively 5%, through the effects of inflation on the marginal threshold when the stamp duty rate rose to 6%. Governments have conveniently forgotten to raise the marginal threshold. The current threshold in Victoria is around $115,000. After that the tax impost of stamp duty raises itself to 6%. That 6% margin used to only tax the very well to do who lived in Toorak or the better end of Brighton. Not any more. Your ordinary mum and dad gets slugged the
Toorak rate in Caroline Springs or Narre Warren. That's the people's representatives representing you which has brought this situation about. Solution. Stamp duty should be a flat 2% on everyone, unless the purchase price is $2 million and above, indexed by CPI.

CGT - Capital Gains Tax. This is a reason investors wont sell even if there is a profit in it for them. Many will die first before selling, to avoid paying CGT.

GST - Builders are pointing out that up to 30% of new housing is taken up by various imposts, planning costs, stamp duty, GST etc.

All the above, combined, has resulted in a significant drop in turnover of property sales in Victoria. Have a look at the statistics.

Turnover of sales in Victoria
2001 182,543 properties
2006 143,416 properties

A decrease of 21%. Twenty one percent or 39,127 fewer properties were sold and the trend has not yet reversed.

This is a huge reduction on the supply side of the economic equation, whilst demand has increased due to population trends and investor demand from negative gearing and individuals chasing wealth progams.

The supply side is throttled by taxation issues, all listed above. Stamp duty is the worst offender as individuals postpone decisions to trade up or down because of the ruinous effect of stamp duty and the cost of switching properties.

Our politicians have their head in the sand on this one, and tinker with bullshit changes around the edges to rates and rebates.

Yes house prices have been rising around the world but Victoria is front and centre on the state in the top 10 of unaffordable housing. Taxes on property throttle and distort the supply and demand equation. The 21% drop in turnover in an economy that is booming is a telling statistic. I ask you John Brumby what are you going to do about it?

If not, the answer is for the Commonwealth to make property taxation a federal tax and let them decide what is a rational levy on property transfers. New Zealand it is Nil

Its a joke

We were instructed to prepare a vendor statement for a sale of an apartment in Building No 5, Lorimer Street Docklands Melbourne

Joke 1. The apartment is affected by 5 body corporates, now called owners corporations. The new legislation Owners Corporation Act mandates the inclusion in the vendors statement of an owners corporation s151 certificate for each body corporate. So, unless the vendor includes the 5 certificates at $150 a pop, this could give rise to the vendor statement being invalid and giving the purchaser an option to withdraw from the sale any time before settlement. It is indeed perverse that One of the five owners corporations, levies the apartment a mere $29 per annum. Yet the owners corporation manager, Property Essentials, can charge our mutual client $750 for providing the 5 certificates. Is this one of the unintended consequences of the new legislation?

Joke 2. The size of the vendors statement could be used as a boat anchor, weighing in at a whopping 308 pages and a slip of a 60 megabyte file. And the agent wants 3 copies. The offending document was the Plan Subdivision as well as the 5 owners corporations certificates. This is not an uncommon problem around Docklands and any hi-rise apartment building in inner city Melbourne. The answer is digital signing of digital vendors statements by vendors and buyers. It can be done and will take some re-educating of estate agents et al.

Is there are answer to the first issue? I guess our politicians need to review the effect of the legislation after 12 months or so. Perhaps a $150 cap on what managers can charge to any vendor whether there is one, two or 5 owners corporations

If you want to view the offending documentation 1303, 90 Lorimer Street Docklands

Do not attempt to print

Real estate agents launch defamation action against Google

Two Victorian real estate agents have launched a defamation action against the search engine company Google.

Counsel for agents Mark Forytarz and Paul Castran of Castran Gilbert, appeared in the Supreme Court today for a directions hearing, alleging their clients have been defamed by articles found via Google searches.

The plaintiffs claim the articles suggest Mr Forytarz bullied an intellectually disabled man into selling his home in order to claim a commission of at least $200,000.

It is claimed the article paints Mr Forytarz as unscrupulous and unethical and he suffered distress embarrassment and humiliation as a result.

They also claim another article alleges Mr Castran used dummy bidders to inflate the prices of the properties he sold.

They claim they asked Google to remove links to the articles late last year, but no effective action was taken.

They will return to court in March.

ABC news 8 Feb 2008