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- 11 October 2005
Property Legislation Amendment Bill
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Page: 18286
Second Reading
The Hon. TONY KELLY (Minister for Justice, Minister for Juvenile Justice, Minister for Emergency Services, Minister for Lands, and Minister for Rural Affairs) [8.14 p.m.]: I move:
That this bill be now read a second time.
I seek leave to have the second reading speech incorporated in Hansard.
Leave granted.
This Bill contains a number of amendments to the Real Property Act 1900, the Conveyancing Act 1919, the Strata Schemes (Freehold Development) Act 1973, the Strata Schemes (Leasehold Development) Act 1986 and the Local Government Act 1993.
The amendments are aimed at remedying a number of problems which have been identified in practice and are the result of an ongoing process of review of the various Acts. I will not speak in detail about all of the amendments, as some are minor changes by way of statute law revision. I will, however, outline some of the more important matters covered by the Bill.
This Bill deals with a number of technical legal matters relating to the law governing real property and conveyancing practice. An explanation of them necessarily involves some legal terminology, so I ask for some forbearance on the part of Honourable Members in this regard.
The first item in this Bill amends the Real Property Act to require that an application to remove a caution from qualified and limited title be accompanied by a survey report.
In order to explain the meaning of "qualified title" I need to firstly discuss the difference between Torrens title and Old System title.
Old System title is the system we inherited from English law. It requires a chain of deeds to prove title to the land. It is cumbersome and is not guaranteed by the State.
Torrens title is simple—a single document, called a Certificate of Title, establishes a person's entitlement to the land and is guaranteed correct by the State of NSW.
"Qualified title" was introduced in 1967 to help speed up the conversion of Old System title land to Torrens title. Think of qualified title as a 'half way house' between Old System title and full, State guaranteed Torrens title. A qualified title has a single Certificate of Title but it is not guaranteed. It contains a "caution" warning that the title may be subject to other interests not shown on the register. This caution will stay on the title for up to 12 years. Once a caution is removed, the title becomes a full, State guaranteed Torrens title.
"Limited title" is created when land is converted from Old System title, but the boundaries of the block of land have not been properly surveyed, so that the boundaries cannot be adequately defined to the satisfaction of the Registrar-General. A "limitation" can only be removed by lodgement of a deposited plan of survey. A title can be both qualified and limited.
A problem arises where a caution is removed from a qualified and limited title before the time period of 12 years has elapsed. An adjoining owner may have a right to claim part of the land by adverse possession because of the position of fences or other structures. If a caution is removed, an adjoining owner could lose any rights they may have to make a claim by adverse possession along the boundaries.
In order to protect any interest an adjoining land owner may have, the amendment contained in this Bill will require the lodgement of a survey report and an identification survey, prepared by a registered surveyor, when an application is made to remove a caution from a qualified and limited folio of the Register. The survey will show if there are any encroachments or occupations which might give an adjoining owner any rights over the land.
The next item amends the Real Property Act to permit the Registrar General to record on title a note of any licences and permits affecting associated Crown land.
The Crown Lands Act 1989 provides for the creation of licences and enclosure permits over Crown land. These rights may authorise the use or occupation of Crown land for a particular purpose, for example, cultivation or for grazing sheep and cattle, or perhaps for a jetty.
In many instances, these licences and enclosure permits are held by the owner of adjoining Torrens title freehold properties. However, when these freehold properties are sold, the related licences and permits are not always identified in the conveyancing process and an incoming owner may not be aware of their existence.
This failure to identify the Crown holding can lead to problems for both the former owner and the incoming purchaser, with the Department of Lands endeavouring to recover the rental and any arrears.
This amendment will authorise the Registrar General to make a note in the relevant folio of the Torrens register for freehold land drawing attention to any associated Crown holdings. This will ensure they are not overlooked when the freehold land is transferred.
The next item I want to highlight is an amendment to the Real Property Act and the Conveyancing Act to allow owners of land to create an easement, restriction on use or profit à prendre over their own land by use of a simple document, without the need for an expensive plan of survey.
By way of explanation, an easement is the right for the owner of one block of land to do something on another block of land. For example, a right of carriageway entitles a person to drive over someone else's land. A restriction on the use of land is a covenant by one owner to refrain from doing something on their land—for example, not to build a house of a particular material or height. A profit à prendre is a right to remove something from another block of land—for example, timber or sand.
At common law a person could not create these rights over their own land. This meant that if a person wanted to subdivide land and sell off blocks with easements, for example, then the easements had to be created each time a block was sold. This was cumbersome.
To overcome this problem, in 1964 the Conveyancing Act was amended to allow a person to create easements and restrictions over their own land, but only by registration of a deposited plan of survey. This system has proven to be very successful. It allows a subdivider to create all necessary easements, covenants or profits a prendre at once in a single document, prior to the sale of any of the blocks.
However, having a plan of survey prepared by a surveyor can be very expensive and may not be necessary in every case.
Under the proposed scheme, the Registrar General will have a discretion to allow a land owner, in a suitable case, to create an easement, restriction on use or profit à prendre by a simple document, such as a Transfer, without having to go to the expense of preparing a full plan of survey. It will be sufficient to annex to the Transfer a much simpler plan called a "compiled plan".
The new facility will provide a cheaper and simpler alternative for the creation of easements, covenants and profits a prendre. Giving the Registrar General a discretion to allow this method in suitable cases, while retaining the ability to insist on a full plan of survey where needed, will ensure that the integrity of the Torrens Register will not be compromised.
The next amendment introduces a new section 55B into the Real Property Act to allow a simpler way of dealing with common law leases recorded on a Torrens title.
If old system land is subject to a common law lease at the time the land is converted to Torrens title, the lease is recorded in the Torrens Register. However, if that lease is transferred, for example, then at present the transfer must be done by old system deed. This is usually more expensive than Torrens dealing.
This amendment will simplify the procedure and reduce conveyancing costs by allowing a common law lease to be dealt with by a simple Torrens dealing form under the Real Property Act.
The next amendments concern two minor problems with the Strata Schemes (Freehold Development) Act and Strata Schemes (Leasehold Development) Act.
The first problem is that there is presently some doubt as to whether a lease of common property in a strata scheme can be varied.
To remove this doubt section 25 of the Strata Schemes (Freehold Development) Act and section 29 of the Strata Schemes (Leasehold Development) Act will be amended to specifically allow for the variation of a lease or sublease of common property in a freehold strata scheme or a leasehold strata scheme.
The second problem is the potential for by-laws to be passed that could enable proprietors in a strata scheme to avoid their obligations under a strata management statement.
Sometimes a single building might contain more than one strata scheme—for example, one strata scheme for residences and a separate strata scheme for shops.
A strata management statement is a contract between the two strata schemes which sets out obligations regarding contributions for maintaining the building.
The bill amends section 28W (5) of the Strata Schemes (Freehold Development) Act and section 57F (5) of the Strata Schemes (Leasehold Development) Act to ensure that by-laws cannot be passed by one strata scheme which override the obligations in a strata management statement.
This Bill also amends the Local Government Act to simplify the way in which a person may transfer a parcel of land to a local Council for the purpose of dedicating it as a public reserve or drainage reserve. At present this can only be done by registration of a plan.
The Department of Lands has received representations that the law on this point should be amended, because the requirement for a plan is sometimes an unnecessary and expensive imposition on land owners and developers.
After consultation with other government agencies, this proposal has been accepted. The amendment will allow a land owner to transfer land to a local Council, for the purpose of public reserve or drainage reserve, by way of a simple Transfer or conveyance, without the need for a plan. It will provide a simple and cost effective alternative for land owners and developers.
The Bill also contains a number of minor amendments of a statue law revision nature, and I do not propose to deal with them in any detail.
Although not lengthy, this Bill contains a variety of worthwhile measures which will improve the efficiency of conveyancing and reduce costs in a number of areas.
I commend the Bill.
The Hon. RICK COLLESS [8.14 p.m.]: The Opposition does not oppose the Property Legislation Amendment Bill, the object of which is to make miscellaneous amendments to the law relating to real property. The legislation that will be amended includes the Conveyancing Act 1919, the Real Property Act 1900, the Strata Schemes (Freehold Development) Act 1973, the Strata Schemes (Leasehold Development) Act 1986 and the Local Government Act 1993. The amending provisions of the bill are designed to remedy a number of problems that have been identified in practice. The bill is the result of an ongoing process of reviewing the Acts to which I have referred.
The bill will amend the Real Property Act 1900 to require the boundaries of land to be adequately defined before an ordinary folio of the register kept in pursuance of the Act, which is otherwise known as the register, is created for the land instead of a qualified folio. The proposed amendments also will require the Registrar General to have regard to a survey report and an identification survey before cancelling a caution on a qualified folio after receipt of an official title search under the Conveyancing Act 1919. The bill will authorise the Registrar General to record a note in the folio of the register to indicate that land has the benefit of a permit to enclose a road or watercourse, or a licence authorising the use or occupation of Crown land granted under the Crown Land Act 1989, or a permissive occupancy granted over that Crown land.
The bill will enable the creation of easements, profits à prendre and restrictions on the use of land that will affect only land that is subject to the provisions of the Real Property Act 1900, otherwise than by the registration of an instrument under section 88B of the Conveyancing Act 1919, when the same person will be the proprietor of the parcels burdened and benefited by the creation of easements, profits à prendre and restrictions. The bill also provides for the recording in the register of dealings that affect a common law lease that is recorded as an encumbrance on the register, and will amend the Conveyancing Act 1919 to remove a reference to a general order for the setting of costs, which is no longer provided for by that Act.
The bill amends the Strata Schemes (Freehold Development) Act 1973 and the Strata Schemes (Leasehold Development) Act 1986 to make it clear that a by-law cannot be made under either Act to allow proprietors in a strata scheme to avoid any of their responsibilities under a strata management statement. The bill amends the Local Government Act 1993 to provide for the dedication and vesting of land in a council as public reserve and the vesting of land in a council as a drainage reserve on the registration of a transfer or conveyance of the land to that council for that purpose. That may presently be effected by the registration of a plan of subdivision that identifies land as a public reserve or drainage reserve.
Finally, the bill makes a number of minor amendments to the Real Property Act 1900 that are consequential upon other amendments. It also repeals an archaic and redundant provision and makes other minor amendments by way of statute law resolution. As I indicated in my opening remarks, the Opposition does not oppose the bill. The amending provisions of it largely provide for sensible changes that will improve the efficiency of conveyancing and reduce costs in a number of areas.
Ms SYLVIA HALE [8.18 p.m.]: The Greens support the bill, which deals with a number of identified problems in the Real Property Act 1900, the Conveyancing Act 1919, the Strata Schemes (Freehold Development) Act 1973, the Strata Schemes (Leasehold Development) Act 1986 and the Local Government Act 1993. The bill's amending provisions will change the current law that governs real property and conveyancing practice. The bill will require that an application made to remove a caution from qualified and limited title be accompanied by a survey report. This will deal with a caution being removed from a qualified and limited title before 12 years has elapsed that would result in an adjoining owner losing the right to make a claim by adverse possession in relation to the boundaries. This amendment requires the lodgment of a survey report and an identification survey when an application is made to remove a caution from a qualified and limited folio of the register.
The bill will also permit the Registrar General to record on a title a notice of any licences or permits that affect Crown land, such as an enclosure permit, licence or permissive occupancy. These uses will be noted in the relevant folio of the Torrens register. The bill will also allow for the creation of easements, restrictions of use or profits à prendre over a parcel of land without needing to perform a plan of survey. This is to overcome the need to produce a survey every time a block of land is subdivided and sold. Under this proposal, the Registrar General will have the discretion to allow a landowner to create an easement, restriction of use, or profit à prendre without having to pay for a full plan of survey. It proposes the use of a compiled plan as an alternative.
Another amendment introduces a new section into the Real Property Act to simplify dealing with common law titles recorded on a Torrens title. The amendments affecting strata schemes are concerned with clearing up the uncertainty about whether the lease of a common property in a strata scheme can be varied. The amendments will make it explicit that a variation of a lease or sublease can occur where common property is involved. Another amendment prevents proprietors in a strata scheme from avoiding their obligations under a strata management statement by amending the by-laws.
The bill amends also the Local Government Act to make it easier for a person wishing to transfer a parcel of land for use as a public reserve or drainage reserve. The requirement for registration of a plan will be removed. Landowners will be able to transfer land via simple transfer or conveyance instead. As a side issue, it may be time for the Government to look at how the Land Titles Office operates. If members have not been to the Land Titles Office, I suggest they go. The place is somewhat antiquated, or dickensian, in its operation. Certain documents are available only in hard copy at the Land Titles Office. It is difficult to undertake a search by name. A title search is an unnecessarily complicated process involving finding the lot number, queuing at a counter, buying a ticket, and waiting for a document to appear in a particular pigeonhole. Surely the public should have free, unfettered access online to all land titles. Old title documents should be scanned and be accessible from anywhere in New South Wales. Searches should be able to be done by street address, surname, or company name. Who owns what should be public knowledge.
The Hon. GREG PEARCE [8.22 p.m.]: The amendments in the Property Legislation Amendment Bill largely make sensible changes that will improve the efficiency of conveyancing and reduce costs in a number of areas. The Opposition supports the Government in making those changes. As a solicitor for 24 years, and a partner in a leading law firm, I had the experience of dealing with the Land Titles Office over many years, although not on a day-to-day basis. I endorse the comments of Ms Sylvia Hale, that going to the Land Titles Office and undertaking searches can be quite time-consuming and frustrating. I certainly found that when I was conducting some research on the pecuniary interests of our good friend the Hon. Eddie Obeid and his companies.
Ms Sylvia Hale: I found that with Barry Cotter.
The Hon. GREG PEARCE: Ms Sylvia Hale had the same experience with Barry Cotter.
Ms Sylvia Hale: There is a family with that name, but not "the" Barry Cotter.
The Hon. GREG PEARCE: The member could have spent a fortune researching the wrong Barry Cotter. Where is the Minister for Finance when he is needed? He could have taken advantage of Ms Sylvia Hale being diverted and spending her money on searching for the wrong Barry Cotter. The objects of the bill are to make miscellaneous amendments to the law relating to real property. I have made a few flippant comments about the Land Titles Office, however, I must say that New South Wales land title and strata title systems are amongst the most efficient and effective in the world. When one reads the history of the Torrens system, which was developed in South Australia, one learns that Australia is in a fairly unique position with land titles. I have been involved in a couple of projects funded by international bodies. One such project involved exporting our land titles system to Vietnam and Cambodia. Australia has been at the forefront in exporting its land titles system to a number of Pacific islands that needed to establish new methods of determining land ownership and title.
The bill amends a number of Acts: the Conveyancing Act 1919, which is not as old as its date implies; the Real Property Act 1900, which has been amended a number of times; the Strata Schemes (Freehold Development) Act 1973; the Strata Schemes (Leasehold Development) Act; and the Local Government Act 1993. Although New South Wales has a very good system of land titles, and the Government is slowly improving some of the technical requirements to ensure that costs are reduced to some extent, it is probably time to revise all the relevant Acts and endeavour to eliminate the technicalities in a sustained way.
Obviously, the process of land titles is not a real priority for the Government—there is a system in place—however, there is the occasional argument about whether lawyers or conveyancers should be involved in conveyancing. That does not tend to be a major political issue, although there have been some prolonged fights over the involvement of conveyancers and non-legally qualified people in conveyancing in New South Wales. My experience is that the experiment with non-legally qualified conveyancers was not a success, given the quite complicated legal framework that still exists and the requirement on conveyancers to deal with a whole range of issues when properties are being bought and sold and when other property transactions take place.
I am pleased that the Government has addressed amendments to the property and title system to improve the efficiency of our land title system. It is already a very good land title system, of which we can be very proud. Any effort to reduce the technicalities and complexities of the system, and thus reduce the costs, is to be supported.
The Hon. TONY KELLY (Minister for Justice, Minister for Juvenile Justice, Minister for Emergency Services, Minister for Lands, and Minister for Rural Affairs) [8.27 p.m.], in reply: I thank honourable members for their contributions and support for the bill, which I commend to the House.
Motion agreed to.
Bill read a second time and passed through remaining stages.
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