Article by Helen Fielder, Nino Di Bartolomeo and Alison
The Real Property and Conveyancing Legislation Amendment
Bill 2009 (the Bill) was passed last week by
both houses of Parliament in New South Wales. It is expected that
the Bill will be proclaimed very shortly. It's implementation
will affect the execution of all mortgages in New South Wales.
The Bill makes a number of significant reforms in the property
area that are designed to combat identity fraud, protect the
Torrens Assurance fund from predominantly fraudulent claims and to
impose a duty on mortgagees when exercising a power of sale.
The reforms that will apply on assent relate to the reaffirming
of the principle of indefeasibility of title contained in section
42 of the Real Property Act 1900 (RPA) and the limitation
on the circumstances and amounts recoverable from the Torrens
The main areas of reform that will commence on a later date are
introduction of additional identification requirements to the
RPA in relation to mortgagees and witnesses; and
requirement of a mortgagee or chargee, in exercising a power of
sale in relation to mortgaged or charged land, to take reasonable
care to ensure that the land is sold for not less than its market
Mortgagees and witnesses must follow a set procedure in order to
be considered to have taken 'reasonable steps' in verifying
the identity of mortgagors. The NSW Government is drafting those
regulations which will undergo a consultative process before
becoming law in the next few months.
We intend to issue a more detailed Legal Update when the
regulations have been drafted, but in the meantime, should you have
any queries in relation to the new reforms, please do not hesitate
You can obtain a copy of the Bill on the NSW Government's
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Whilst option to purchase clauses are more in commercial properties, they are now being included in residential leases.
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