The humble paper Certificate of Title, for generations the ultimate symbol of property ownership in Victoria, is officially riding into the sunset. As of 3 August 2024, the Victorian Register of Land has gone fully digital, issuing only electronic Certificates of Title (eCTs). But what does this mean for you as a property owner? Is your old paper title now worthless? And who exactly is in control of your new digital asset?
This isn’t just a bureaucratic reshuffle. The move to a purely electronic system, governed by the Transfer of Land Act 1958, represents the most significant change to Victorian conveyancing in decades. It’s a shift designed to make property transactions faster, more secure, and more efficient. However, it also introduces new concepts and choices for property owners that are crucial to understand.
At Hayton Kosky, we’ve been helping Melburnians navigate the complexities of property law since 1991. We’ve seen it all, from the days of handwritten ledgers to the dawn of digital conveyancing. Let’s break down what this transition means, what your options are, and why this digital leap is ultimately a win for property owners.
The End of an Era: Why Paper Titles Are Being Phased Out
For over 160 years, the paper Certificate of Title has been a cornerstone of the Torrens system of land registration in Victoria. It was a physical document that provided absolute proof of ownership. But in a digital world, paper has its drawbacks.
A paper title can be lost, stolen, or destroyed in a fire or flood. It can be a target for fraud, with sophisticated criminals capable of creating convincing forgeries to illegally sell or mortgage a property without the owner’s knowledge. We’ve all heard the horror stories.
The move to eCTs is the final step in a long journey towards a fully digital property register. Over 65% of titles in Victoria were already electronic before the August 2024 cut-off. The new system eliminates the risks associated with physical documents by storing title information securely in the Victorian Land Registry’s central, digital database.
So, what should you do if you still have a paper Certificate of Title tucked away in a safe deposit box or with your lawyer?
The short answer is: nothing, for now. Your existing paper title remains valid proof of ownership until the next time you transact with your property. When you next sell, refinance, or otherwise deal with your land, your paper title will be cancelled, and an eCT will be issued in its place. There is no need to proactively convert it.
Who Holds the Keys? Your Three Options for Controlling an Electronic Title
This is the most critical change for property owners to understand. With an eCT, there is no physical document to hold. Instead, control of the title is managed electronically. When an eCT is created, you will have one of three options for who holds that control:
- Control by Your Mortgagee (Your Bank)
If you have a mortgage on your property, this is the default and most common scenario. Your bank or lending institution will have electronic control of the eCT. This is the digital equivalent of the bank holding the paper title deeds as security for your home loan. They will hold this control until the mortgage is discharged (paid off). Once the mortgage is discharged, you will then need to choose one of the other two options.
- Control by Your Legal Practitioner or Conveyancer
If you own your property outright (with no mortgage), you can choose to have a legal practitioner or licensed conveyancer hold control of the eCT on your behalf. This is a popular option for those who want the peace of mind of having a legal professional manage their title. It ensures that the title is secure and ready for any future transactions, and your lawyer can act quickly on your instructions.
At Hayton Kosky, we offer this service to our clients, providing a secure and professional option for managing your most valuable asset.
- Control by the Registrar of Titles
If you have a clear title with no mortgage and you don’t nominate a legal representative, the eCT will be held by the Registrar of Titles. This means the title is held in the Victorian Land Registry under your name, but no specific party has control. To transact on the property in the future, you will need to engage a conveyancer or lawyer who will then need to take steps to obtain control of the title from the Registrar before a transaction can proceed.
Why Electronic is Safer: The Inherent Security of eCTs
While the idea of an intangible, digital title might seem unnerving at first, it is fundamentally a safer and more secure system. Here’s why:
- Eliminates Physical Risk: An eCT cannot be lost in a house move, accidentally thrown out, or destroyed in a natural disaster. It exists permanently and securely within the state’s land registry system.
- Reduces Fraud: The electronic system is integrated with PEXA (Property Exchange Australia), the secure digital platform used by lawyers, conveyancers, and banks to complete property transactions. This platform has strict verification and identity checks, making it significantly harder for fraudulent dealings to occur.
- Greater Certainty: The digital register is the single source of truth. It removes any ambiguity about who owns a property and who has the right to deal with it.
The Hayton Kosky View: Embracing a Secure Digital Future
The transition to electronic titles is a positive step for Victoria. It brings our property system into the 21st century, offering a more secure, efficient, and reliable way of managing land ownership. While the change may require a shift in mindset, the benefits are clear.
Understanding your options for controlling your eCT is the most important part of this transition. Whether your title is held by your bank, your lawyer, or the Registrar, knowing who is in control and how to transact in the future is key.
If you have any questions about the new electronic title system, what it means for your property, or you wish to discuss having Hayton Kosky control your eCT, please don’t hesitate to contact us for an initial consultation.
Disclaimer: This blog provides general information and should not be considered legal advice. You should consult a lawyer for advice on your specific circumstances.