necs in nsw consultation papers

www.lpma.nsw.gov.au

NECS in NSW Consultation Papers

A consultation process addressing transaction specification, business practice and implementation arrangements for the National Electronic Conveyancing System (NECS), and relevant requirements of conveyancing industry participants and community members in NSW.

4. Land Registry TransactionServices for Conveyancing

being land title information and other services for due diligence, preparation and compliance assurance of a real property transaction for lodgment and registration by the NSW Land Registry.

08 March, 2010

Information contained

in this document was correct at

time of publication, but may have

been superseded

About this Consultation Paper This paper is published by the Land and Property Information Division (LPI) of the NSW Land and Property Management Authority (LPMA). It describes proposed changes in conveyancing practice, risk management and systems arrangements for the settlement of real property transactions and the lodgment and registration of real property registry instruments (dealings) in NSW. Its intention is to make widely known the detail of proposed changes under consideration and to invite feedback on them. It does not represent NSW Government policy.

This Consultation Paper and the issues it raises need to be considered in the context of the intention of all jurisdictions and industry participant groups to achieve a single national system for electronic conveyancing in Australia. The paper forms part of a series of public consultation papers designed to ensure NSW based industry requirements are considered in the design, functionality and supporting arrangements of a National Electronic Conveyancing System (NECS).

Your feedback, comments, suggestions and criticisms should be made available to Land and Property Information by one of the following means:

Email: [email protected]

Letter: NECS in NSW Industry Consultation Feedback

Land and Property Information

GPO Box 15

SYDNEY NSW 2001

or

DX 17

SYDNEY

Telephone: (02) 8236 7173 (8:30am to 4:30pm weekdays)

Additional copies of this paper can be downloaded free of charge in PDF file format from the LPMA website at http://necsnsw.lands.nsw.gov.au/industry_consultations/consultation_papers.

Comments and responses should be submitted by the dates specified in the introduction sections of each consultation paper.

Responses will be acknowledged and may be published on the LPMA website and/or referenced in report/s recording consultation findings unless you indicate in your submission that you wish your comments to be confidential. Responses will not be used for any other purpose than to determine the preferred technology and business practice arrangements for implementation of NECS in NSW.

© Copyright in this paper is held by the Land and Property Information division of the Land and Property Management Authority. Division 3 of the Commonwealth Copyright Act 1968 recognises that limited further use of this material can occur for the purposes of fair dealing – for example study, research or criticism. However, to make use of this material, other than as permitted by the Copyright Act, please write to Land and Property Information at GPO Box 15, Sydney NSW 2001.

NECS in NSW Consultation Paper

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The Agency Privacy Statement provides an overview of how any personal information collected or stored by the agency is handled. The Privacy Statement can be viewed at http://www.lands.nsw.gov.au/privacy/LPMAprivacystatement Further information Further information on the National Electronic Conveyancing System (NECS) proposals, and supporting information, analysis and specifications relevant to implementation of NECS in NSW is available at www.necs.gov.au and http://necsnsw.lands.nsw.gov.au/home. Publisher’s Note The National Electronic Conveyancing System (NECS) is Australia's joint government and industry initiative to create an efficient and convenient way of completing property based transactions and lodging land title dealings for registration. In January 2010 the governments of New South Wales, Queensland and Victoria formed National E-Conveyancing Development Ltd (NECDL), to progress creation of a system to provide an efficient competitive system to settle property transactions, lodge instruments with land registries, and pay associated duty and tax obligations electronically, without increasing the cost of such services to the community or excluding any current market participant from operating in the new electronic environment. During 2010 NECDL is expected to develop a work program to complete specification and implementation planning for NECS. As at the time of publication of this document, the national work program to specify the legal framework, systems requirements and business practices for NECS is maintained and coordinated by the National Electronic Conveyancing Office (NECO). NECS documents and progress information are available at www.necs.gov.au. NECO is coordinating national consultations on a range of legislation, business practice and technology specification subjects during 2009-10. The principal NECS industry consultation mechanism is the National Project Team, a representative group comprising members drawn from industry and government, with its role to make recommendations on business requirements, supporting arrangements and implementation issues for NECS. Land and Property Information encourages participants in these ‘NECS in NSW’ consultation arrangements to consider also forwarding responses and contributions on NECS technology specification, business practice and implementation arrangements to the attention of the NECS National Project Team, using contacts accessible through the NECS website at http://www.necs.gov.au/National-Project-Team/default.aspx. In the interests of consistency and transparency, where the National Project Team has reviewed or made recommendations on an issue relevant to a NECS in NSW Consultation Paper, those comments or recommendations will be made clear in the paper. Land and Property Information also undertakes to contribute outcomes and recommendations arising from NECS in NSW industry consultations to the relevant NECS processes, to assist in development of consistent national system requirements, risk management and business practice arrangements for NECS. Acknowledgment Land and Property Information acknowledges the ongoing engagement with and contribution by industry stakeholders to the NECS development program, in particular the Law Society of NSW, the Australian Institute of Conveyancers NSW Division, the Information Brokers and Law Stationers Association and Australian Bankers’ Association; additionally, the assistance of Clayton Utz in the research and preparation of these NECS in NSW consultation papers is acknowledged.


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Disclaimer Land and Property Information has produced these consultation papers to provide general information relating to business practice, legislative and systems technology arrangements being considered in the development of a National Electronic Conveyancing System for Australia and for its implementation in NSW. LPI has used its best endeavours to ensure that the information contained in this paper is correct at the time of publication but takes no responsibility for any error, omission or defect herein. The contents do not constitute legal advice and should not be relied upon as such. LPI disclaims any liability to any person in respect of anything done or not done by any such person in whole or partial reliance upon the whole or part of the information in this paper.


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Registrar General’s Message

In July 2008 the Council of Australian Governments (COAG) agreed to the development and implementation of NECS. The first step was to be the establishment of the entity needed to make the development decisions for the system. This major milestone for NECS was achieved in January 2010, with the formation of National E-Conveyancing Development Ltd (NECDL)1.

NECDL has been established and funded by the governments of Queensland, NSW and Victoria to progress the work previously being guided by the National Steering Committee. The company is chaired by Alan Cameron AM, a lawyer and former Chairman of ASIC, who brings extensive business and governance skills to the company critical to its task. Directors of the entity include three government and three industry directors including nominated directors by the Law Council of Australia, Australian Banking Association and Institute of Conveyancers. NECDL’s challenge is to progress creation of an efficient competitive system to settle property transactions, lodge instruments with land registries, and pay associated duty and tax obligations electronically, without increasing the cost of such services to the community or excluding any current market participant from operating in the new electronic environment. NECDL’s constitution identifies associated objectives including; • developing the business processes, rules and procedures necessary to support

commencement of the System; • developing the necessary software, and leveraging the maximum benefit possible from prior

work including ECV and NECO work programs; • coordinating required legislative and regulatory changes; • developing a program for implementation; and • providing reasonable non-discriminatory access to the System for participants in

conveyancing in COAG jurisdictions. Further information about NECDL is available from the NECO website at www.necs.gov.au/NECDL-FORMATION/default.aspx, and from the ASIC register. The initiatives described in this series of consultation papers represent a major development in the systems, procedures and practices of the conveyancing and mortgage financing industry in New South Wales. The Torrens land titling system as adopted in New South Wales has deservedly earned a reputation as being among the most efficient and reliable in the world. Introduced in 1863, the system served us well for 120 years as an entirely paper-based system requiring the noting of titles and interests using pens, stamps and typewriters. For the past 25 years an electronic register has provided faster recording and far easier access to title information crucial to many processes associated with land development, conveyancing and financing. NSW led the way in development and implementation of an electronic register, and it is now time to take the next step in improving the efficiency of processes associated with land development, conveyancing and financing. Electronic conveyancing will be introduced in NSW by 2011, and participation by NSW industry and community members in specification of technology, business practice and implementation arrangements will be vital to prompt take-up of electronic conveyancing, and to achievement of associated cost savings. 1 See the NECDL entity’s corporate document available on the Australian Securities and Investments Commission corporations register at http://www.search.asic.gov.au/cgi-bin/gns030c?acn=140_677_792&juris=9&hdtext=ACN&srchsrc=1.


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Land and Property Information (LPI) is conducting a thorough program of preparation to support implementation of NECS in NSW. An internal ‘readiness’ program is developing the technology services required to service NECS transactions and efficiently examine and apply electronic interest and ownership changes to the register. A critical part of the program is determining the technology specification, business practice and implementation requirements for NECS of industry participants in NSW, to ensure that NECS is structured and implemented so as to facilitate prompt widespread adoption and use in NSW. The move to an electronic business environment for conveyancing represents a significant change in industry practices. The roles, relationships and responsibilities of many of the participants in the industry must be adapted to facilitate the new way of working. Legislation will be adjusted in the States and Territories, conveyancing business practices changed, and new requirements and controls introduced that will change existing risk allocations and mitigation responsibilities. New systems and technology arrangements must be implemented, to provide for creation and validation of electronic document cases suited to electronic settlement and lodgment for registration. In 2009 LPI published an independent Economic Appraisal2 of the implementation of NECS in NSW, to identify and confirm the potential economic benefits achievable through NECS. The study was conducted by KPMG and based on data confirmed with industry participants, quantifying savings achievable through business process and technology changes associated with NECS. The appraisal identified opportunity for industry to achieve substantial operational efficiencies, with findings including:

• a ‘mature year’ saving of $49.8M pa in conveyancing costs in NSW; • an average saving of $170 per property sale or refinance; • general agreement by stakeholders that national electronic conveyancing will result in

significant industry cost savings; and • a positive Net Present Value of $164.1M over the period to 2020 for the estimated $30M

NSW proportion of industry, government and NECS setup costs.

The study identified that 62% of potential NECS cost savings arise in the settlement and lodgment stages of conveyancing activity, and include reduced duplicated data entry and re-work, courier and bank cheque savings, and Certificate of Title related savings. Qualitative benefits of NECS identified in industry responses included:

• faster lodgment of time-critical dealings • earlier availability of cleared funds after settlement; • automated business-to-business data exchange and compliance assurance; • direct lodgment of dealings after settlement; and • easier access to lodgment for rural and remote communities.

The NSW economy can attain the greatest benefit from electronic conveyancing where NSW is ready for implementation of NECS as soon as an acceptable system is in place. The consultation papers issued in this series present an important opportunity for industry participants involved in conveyancing and property financing in NSW to contribute to the specification of practice, risk management and systems arrangements that will become the principal method of documenting, settling and registering changes to property interests in Australia in coming years. In preparation for NECS the LPMA is preparing transactional services to come online during 2010-11, including transitional products and services that can be readily adopted by industry, and assist in the overall facilitation of NECS. The LPMA has received strong industry representation and engagement with the consultation program to date, and I am confident of continued industry support in NSW for these important 2 The KPMG Economic Appraisal of NECS in NSW may be viewed and downloaded through the Lands website at http://necsnsw.lands.nsw.gov.au/publications.


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reforms. Once again, I invite and encourage your consideration and feedback on the proposals raised in these consultations.

Warwick Watkins AM Registrar General March 2009


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About the National Electronic Conveyancing System3

The National Electronic Conveyancing System (NECS) is a computer system and a set of supporting rules and business practices within a legal framework that provides a reliable means of completing conveyancing transactions electronically. These arrangements are intended to replace the existing paper-based processes in all jurisdictions for the approximate 70% of transactions that are relatively common and routine.

The development of NECS is being co-ordinated by a National Electronic Conveyancing Office (NECO) through a National Project Team (NPT) and State Project Teams (SPT) overseen by a National Steering Committee (NSC) of government and industry representatives. The work is supported by the Council of Australian Governments (COAG) which has undertaken to establish permanent governance arrangements and provide establishment funding to support the system during implementation and take-up.

The basis of NECS is set out in roadmap documents published by NECO at www.necs.gov.au in particular a National Business Model (NBM), National Implementation Strategy (NIS), NECS Operations Description (NOD) and NECS Requirements Definition (NRD). These documents provide essential background to the issues raised in this Consultation Paper.

Also available on the NECO website are an independent risk assessment and a comprehensive regulatory review of the NBM, other expert advice on key issues and the papers on specific issues being considered by the NPT. These documents also provide essential background to the issues raised in this Consultation Paper.

What NECS Will Do

As a national facility to assist industry participants in more efficiently completing conveyancing and mortgage financing transactions, NECS will provide an electronic environment to:

• collect transaction information and have it checked and verified for completeness and compliance;

• prepare instruments and reports to register changes in property ownership and interests; • settle financial transactions, including payment of duties, taxes and disbursements; • comply with the tax and duty requirements of Revenue Offices; and • lodge instruments with Land Registries and receive confirmation of their lodgment and

registration.

NECS is likely to be owned by government but operated as a corporation. NECS will be an industry facility available to all eligible industry participants to use in their delivering more efficient services to consumers.

What NECS Will Not Do

Inevitably, there are aspects of the total conveyancing process that will remain outside NECS and these include:

• disclosures required of vendors prior to sale; • preparation and exchange of contracts for sale; • pre-settlement investigations undertaken on behalf of purchasers; • procurement of any insurances required by purchasers; • creation of loan documentation by lenders; • non-financial aspects of settlement; and • processes for examining and registering instruments once lodged with the Land Registry.

3 This outline of the National Electronic Conveyancing System has been provided by the National Electronic Conveyancing Office as an information resource for inclusion in the NECS in NSW Consultation Documents. More detailed information about NECS is available from the NECS website www.necs.gov.au.


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The realisation of NECS may, however, have consequential impacts in some of these areas as industry practices evolve and adjust to make best use of NECS.

Key Roles in NECS

The major change to current conveyancing practice that is necessary to move to an electronic business environment is that, with some exceptions, Transacting Parties will no longer sign the instruments that instruct the Land Registry in each jurisdiction how to update its Torrens Title Register. In most instances an independent party will certify to the correctness of instruments and sign them on behalf of the Transacting Party or Parties. This change necessitates prescription of several key business practices which, in the interests of achieving a single national system, need to be consistent across all jurisdictions.

The key roles in NECS that are involved in securing a safe and reliable electronic conveyancing environment are:

• Transacting Parties are the individual vendors, purchasers, mortgagors or mortgagees dealing in property. They are persons and corporations.

• Clients who are the collection of Transacting Parties acting together in engaging a Subscriber to complete their transaction. They may be joint tenants or tenants in common and there may be any number of them provided they are acting collectively with a common purpose.

• Subscribers who are engaged by their Clients to use NECS in completing conveyancing transactions. They are legal and conveyancing practices, financial institutions, mortgage processors and government agencies.

• Users who are employees or contractors of a Subscriber authorised by the Subscriber to use NECS on the Subscriber’s and the Subscriber’s Client’s behalf

• Certifiers who are Users authorised by a Subscriber to certify compliance and sign instruments and other documents in NECS. The compliance certifications are as to the Subscriber having complied with all prescribed business practice requirements and the signings are as to the intention of the Subscriber’s Client

• Land Registries and Revenue Offices that prescribe required business practices to secure community confidence and receive instruments for registration of property interests and reports for ensuring compliance with duty and tax requirements and duty payments.

Other roles include Licensed Service Providers and a Financial Settlement Manager that provide support services.

NECS Design Principles

The functions and features of NECS are intended to conform to the following design principles:

• financial settlement practice consistent and compatible with, and making maximum use of, established financial payments industry procedures and infrastructure;

• registry instrument4 preparation and lodgment practices independent of any Land Registry but accommodating of the requirements of all Land Registries

4 A registry instrument is also known as a “dealing” in NSW conveyancing.


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• duty and tax payment practices independent of any Revenue Office but accommodating of the requirements of all Revenue Offices;

• a common standard for the electronic authentication of users whose certifications and signatures have to be relied upon in financial settlements and instrument registrations;

• a common format for the transmission of data to and from users, Land Registries and Revenue Offices;

• a single point of access and a common support infrastructure for users; and • provision for users of varying sophistication, experience, technical competence and access

requirement.

These principles are intended to secure the maximum possible utility, robustness and acceptance for NECS in an environment characterised by long-standing practices, competing interests, market diversity, legislative constraints and public policy variations.

NECS Development Strategy

NECS is being developed with the intention of:

• minimum change to the long-standing concepts behind existing paper-based conveyancing and mortgage financing processes;

• maximum adoption of relevant and compatible concepts in existing jurisdiction business models;

• maximum adoption of relevant and compatible features and functions in the Victorian ECV system;

• maximum adoption of relevant and successful concepts from other electronic business environments;

• maximum utilisation of the common characteristics of relevant industry conditions and practices;

• maximum involvement of key stakeholder representatives in developing policies, systems and procedures; and

• avoidance of any concept, function or feature likely to preclude any jurisdiction or industry group from participating.

This approach is expected to secure maximum industry support and use by minimising the amount of change needing to be dealt with by jurisdictions and by industry participants in adopting NECS as their preferred way of completing conveyancing transactions and in readying their own facilities and practices to make maximum use of it.

Consistent Business Practices in NECS

The move to the electronic business environment of NECS represents the most significant change in industry practices in the last 150 years. The most significant of these changes is that in the main Transacting Parties will no longer sign the registry instruments that will change their registered interests in property. To accommodate this and other changes, the roles, relationships and responsibilities of many industry participants will need to evolve to facilitate the new way of working. It is essential to the success of NECS that changes to legislation, business practices, risk allocations and controls are co-ordinated across all jurisdictions so that the outcomes deliver consistent business practices in all States and Territories.

The business practice change presented and discussed in this Consultation Paper is one critical to the effective deployment of NECS in NSW.


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NECS in NSW Consultation Paper: Land Registry Transaction Services for Conveyancing

Contents 1. Introduction ............................................................................................................................................... 4

1.1. Land Registry services required for preparation and compliance assurance of real property transactions ................................................................................................................................................... 4 1.2. Context of this consultation paper .................................................................................................... 6 1.3. Commenting on this paper ................................................................................................................ 7

2. Executive Summary ................................................................................................................................... 8 2.1. Overview ............................................................................................................................................ 8 2.2. Background to LR Transaction Services (Section 4) ........................................................................... 8 2.3. National Project Team recommendations (Section 5) ...................................................................... 9 2.4. Future requirements for LR Transaction Services (Section 6) ......................................................... 10 2.5. Registry instrument templates (Section 7.1) ................................................................................... 10 2.6. Registry Information (Section 7.2) ................................................................................................... 10 2.7. Title Activity Check (Section 7.3) ..................................................................................................... 11 2.8. Compliance assurance (Section 7.4) ................................................................................................ 11 2.9. Delivery of documents (Section 7.5) ............................................................................................... 12

3. Specific Questions for Stakeholders ........................................................................................................ 13 4. Background to Land Registry Transaction Services ................................................................................. 17

4.1. Land Registry Transaction Services for conveyancing ..................................................................... 17 4.2. Future requirements for Transaction Services ................................................................................ 18 4.3. National proposals for Land Registry Transaction Services ............................................................. 19

5. National Project Team Recommendations on Transaction Services ....................................................... 21 6. Use of Land Registry Transaction Services .............................................................................................. 23

6.1. Land Registry Transaction Services used in the conveyancing process .......................................... 23 6.2. Land Registry Transaction Services required for electronic conveyancing process ........................ 24 6.3. Achieving interoperability for information exchange and compliance assurance .......................... 27 6.4. Channels for access to Transaction Services ................................................................................... 31 6.5. Strategy for implementation of Transaction Services ..................................................................... 32

7. Specification of the LR Transaction Services Required ............................................................................ 35 7.1. Registry instrument templates ........................................................................................................ 35 7.2. Registry Information ........................................................................................................................ 39 7.3. Title Activity Check Subscription ..................................................................................................... 42 7.4. Compliance assurance ..................................................................................................................... 46 7.5. Delivery of documents ..................................................................................................................... 49

8. Glossary of Terms .................................................................................................................................... 50 9. Source Materials ...................................................................................................................................... 55 10. Appendices .......................................................................................................................................... 55

Appendix A: Example of Conventional Title Search for the Sydney Opera House ...................................... 56 Appendix C: Introduction to the Business Rules Approach ......................................................................... 69 Appendix D: Scope of Information for Registry Information ...................................................................... 71 Appendix E: Lodgment Verification Report – draft concept for discussion ................................................ 72


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1. Introduction

1.1. Land Registry services required for preparation and compliance assurance of real property transactions

Information is provided by the Land Registry for industry (or any interested party) to conduct due diligence1

The Torrens Title system was adopted in Australia because it provides a very effective and efficient means of supporting conveyancing and providing certainty in relation to land ownership. Five qualities have been identified as essential in any land registration system – these are reliability, simplicity, low cost, speed and suitability

of conveyancing and mortgage financing transactions and to prepare and compliance assure the associated registry instruments for lodgment and registration at the Land Registry (LR). The scope of products and services required from the Land Registry by the conveyancing industry for due diligence, automated preparation and compliance assurance for conveyancing transactions are referred to as LR Transaction Services and are the subject of this paper.

2

In Sir Robert Torrens’ Essay on the Transfer of Land by Registration

. These characteristics are as important today as when they were originally identified by Sir Robert Torrens in the 19th Century.

3

The Land Registry has a critical role in ensuring achievement of these five quality characteristics by providing a system of title by registration and supporting it with Transaction Services that have the attributes of

he concludes by including quotes on the benefits achieved by the system ‘…Stability of title, with safety to purchasers and mortgagees, has been secured. The ownership of property, both in town and country, is shown by the register at a glance, and whether encumbered or not. It increases the saleable value of property. It enables both vendors and purchasers to accurately ascertain the expense of carrying out any sale or transfer…It prevents frauds and protects purchasers and mortgagees, and has operated so as to almost entirely dispense with the investigation of prior title. Loans on mortgages are effected, and transfers of the fee are made, with as much ease as the transfer of bank stock is made in England, a search from five to ten minutes being all that is necessary to disclose the state of any registered title’.

4

• Reliability: meaning ensuring the integrity of the Torrens Title Register;

:

• Simplicity: meaning providing a “one-stop” search of interests relevant to the title;

• Low cost: meaning facilitating a reduction in time spent by conveyancers and solicitors in confirming title

• Speed: meaning the timely provision of the information necessary for a due diligence check

• Suitability: meaning the system must meet the needs of the community, which includes the conveyancing industry and other stakeholders that require a fraud-resistant system to support real property ownership.

1 Due diligence is a process of collection of material facts relating to a Land Title and proposed changes to that title. In this paper, the term ‘conveyancing’ is used for the scope of industry activities involved in both conveyancing and mortgage financing. 2 Refer Torrens Title in a Digital World by Lynden Griggs at http://www.murdoch.edu.au/elaw/issues/v8n3/griggs83.html and Is the Torrens system Suitable for the 21st Century by Birrell, Barry, Hall and Barker to be found at http://www.ferris.edu/FACULTY/BURTCHR/sure382/other_material/torrens_21st_century.htm 3 A copy of the essay can be found at the National Library of Australia http://catalogue.nla.gov.au/Record/2275335?lookfor=operative%20%7Bpi:nla.aus*%7D&offset=1&max=13 4 The requirements for the five characteristics are drawn from the papers Torrens Title in a Digital World and Is the Torrens system Suitable for the 21st Century referenced above.


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http://www.murdoch.edu.au/elaw/issues/v8n3/griggs83.html�

http://www.ferris.edu/FACULTY/BURTCHR/sure382/other_material/torrens_21st_century.htm�

http://catalogue.nla.gov.au/Record/2275335?lookfor=operative%20%7Bpi:nla.aus*%7D&offset=1&max=13�

Transaction Services currently provided by the Land Registry to support conveyancing include:

• information services such as title and historical searches and copies of registered instruments

• registry instrument forms as electronic .PDF templates and in hardcopy format

• Registrar’s Directions and instruction sheets for preparing registry instruments that comply with lodgment and registration requirements.

The due diligence and compliance assurance interpretation of searches for transactions involving a Land Title is currently all done manually by transacting participants and their agents, although the search itself may be delivered electronically to the user.

Information services such as Title Searches and copies of registered instruments are supplied through information brokers, via the LPMA website or in hard-copy over the counter at the Land Registry. The information products are used by industry practitioners for vendor disclosure and warranties associated with contracts of sale. Practitioner and lender due diligence checks subject most transactions to a final Title Search immediately prior to settlement to ensure that there has not been any change on the Land Title since the last Title Search was obtained.

The interpretation of the information obtained from the Land Registry is done manually by industry users, and data from the searches is entered manually into industry practice management systems or registry instrument forms.

Registry instrument forms can be completed online at the LPMA website, or the forms can be downloaded5

Registrar’s Directions and instructions for preparing registry instruments are published on the LPMA website for download and use by industry practitioners.

or replicated by industry users for off-line completion in their own in-house systems. Currently, automated preparation of instruments by industry practitioners or financial institutions using their in-house systems requires the firms or their software providers to create their own versions of authorised electronic templates for this purpose and licence these templates with the NSW Land Registry.

The transition to electronic conveyancing and use of an electronic business environment for preparation, settlement and lodgment of transactions requires enhancement of the information and associated services provided by the Land Registry. This need for enhanced services has been identified through:

• development of the functional requirements for electronic conveyancing in the NECS Roadmap documents;

• industry requests and feedback in response to national and NSW Land Registry consultation; and,

• NSW NECS Readiness investigation and analysis of future requirements necessary to maximise the efficacy of electronic and automated paper-based conveyancing.

Feedback on industry practices suggests that enhanced Transaction Services can facilitate benefits for industry practitioners, financial institutions and the Land Registry in both electronic and paper conveyancing environments. To achieve these benefits, Transaction Services must be suited to industry system requirements and support end-to-end process efficiency improvements and effective risk management arrangements.

This consultation paper seeks industry comment on the NSW Land Registry proposed development program for Transaction Services.

5 The eNOS required to accompany some instrument types must be completed at LPMA via an Information Broker or via the LPMA website.


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1.2. Context of this consultation paper

Land and Property Information is developing and publishing a number of consultation papers and supporting information during 2009 and 2010, as part of a ‘NECS in NSW’ Readiness Program, to prepare and implement business practices, operational systems, legislation and stakeholder communication in NSW to support implementation of national electronic conveyancing by 2011. Consultation papers and supporting information may be downloaded from the Lands website at http://necsnsw.lands.nsw.gov.au/home

The following NECS transaction specification, business practice and implementation arrangement topics are expected to be addressed in the ‘NECS in NSW’ consultation program:

.

Client Authorisation Agreement for use of NECS

being the requirements of Subscribers to obtain written authority to represent a party to a transaction in the NECS

Instrument Certifications being the nature and extent of certifications required of Certifiers signing instruments prepared using the NECS and intended for lodgment with a Land Registry

Digital Signing of Electronic Instruments

being the signing and authentication of electronic registry instruments for NECS by Certifiers using digital signatures

Land Registry Transaction Services for conveyancing

being details of the land involved in a transaction, workspace verification and lodgment acceptability advice services available from the Land Registry for conveyancing

Subscribers and Certifiers Operational Roles and Responsibilities

being the requirements for the roles of Subscriber and Certifier set out in the National Business Model (NBM) for the NECS

Certificates of Title and Control of the Right to Deal

being the means by which the right to deal in a Land Title is evidenced by the controlling party for a transaction in the NECS

Client Identity Verification practices

being the requirements for Subscribers to identify parties to a NECS transaction

Supporting Evidence Requirements

being the documentation required to be obtained by Subscribers in support of registry instruments prepared using the NECS






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http://necsnsw.lands.nsw.gov.au/__data/assets/pdf_file/0016/110680/13131_NECS_Paper_4.pdf�

http://necsnsw.lands.nsw.gov.au/__data/assets/pdf_file/0016/110680/13131_NECS_Paper_4.pdf�

NECS Roles, Relationships and Practices The following diagram shows the roles, relationships and practices most directly affected by the consultation paper topics. Figure 3: NECS Business Practices and Transaction Service Environment

6

Client Subscriber Certifier N E C S

LR Client Identity

Verification

Client Authorisation

Supporting Evidence

Digital Signing

Control of Right to Deal

Instrument Certification

Subscriber & Certifier roles and

responsibilities

LPMA authorised Information Broker,

LPMA website Subscriber Subscriber

Systems

Land Registry transaction

services

1.3. Commenting on this paper

Comments are invited on any matter in this paper. Comments are specifically invited on the issues listed in section 3.

Comments on this paper should be sent to Land and Property Information by one of the following means:

Email: [email protected]

Letter: NECS in NSW Industry Consultation Feedback

Land and Property Information

GPO Box 15

SYDNEY NSW 2001

or

DX 17

SYDNEY

Telephone: (02) 8236 7173 (8:30am to 4:30pm weekdays)

Comments on this paper are due by the 19th of April 2010






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mailto:[email protected]�

2. Executive Summary

2.1. Overview

The transition to electronic conveyancing and use of an electronic business environment for preparation, settlement and lodgment of transactions requires enhancement of the information and associated services provided by the Land Registry.

This paper discusses:

• proposals for Land Registry Transaction Services necessary to support electronic conveyancing • how Land Registry information and compliance assurance services can be provided to industry • a transition strategy for the implementation of Land Registry Transaction Services • the specification of Land Registry Transaction Services required:

o Registry Instrument templates o Registry Information o Title Activity Check o Compliance assurance o Delivery of documents

The paper contains 33 questions on which the NSW Land Registry is seeking feedback from conveyancing industry participants.

2.2. Background to LR Transaction Services (Section 4)

Transaction Services need to be designed to support the electronic conveyancing process in a manner that maximises its efficiency and cost effectiveness for all stakeholders and provides for consistency between paper and electronic conveyancing.

The independent risk assessment of NECS developed a detailed risk register and a set of performance objectives for a risk management regime. This set included the objective of NECS achieving: assurance that all legal and regulatory mechanisms preventing, mitigating or allocating risks are applied consistently and provide clear and specific guidance to participants. LR Transaction Services are critical for satisfying this objective. Risk Assessment and Management in Electronic Conveyancing, DUBLIN Conference: REGISTERING THE WORLD SESSION 4 27 SEPTEMBER 2007, Presented by Mark Sneddon of Clayton Utz. Accessed from http://www.necs.gov.au/NECS-Presentations/default.aspx 8 March 2010.

NECS consultation has identified the services required for implementation of electronic conveyancing as:

1. Registry instrument templates with an XML data requirement defined in NECDS to be used for automated preparation and rendering of variable data together with fixed text in a standard format to create the legal form of an instrument for human or electronic interpretation of transaction information for registration.

2. Registry Information that contains discrete XML title data equivalent to a Title Search necessary for use in populating and validating electronic documents for a Lodgment Case.

3. Title Activity Check (TAC) service that can be called at the Land Registry to inform the NECS Workspace, in which the purchaser of the TAC service is a participating Subscriber, whether a change has occurred on a specific title reference during the subscription period for the service.

4. Compliance assurance comprising:

4.1 Publication of compliance assurance business rules suitable for conveyancing industry participants and NECS to consistently implement in their practices and systems for preparation and verification of registry instruments for lodgment and registration in NSW, and






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4.2 A Lodgment Verification compliance assurance service at the Land Registry that can be called for compliance assurance of a Lodgment Case in a NECS Workspace prior to lodgment with the Land Registry.

Consultation also suggests that there may no longer be a requirement for the Land Registry to return the original mortgage to the Lodging Party after registration. The NSW seeks industry confirmation (or otherwise) on this matter.

2.3. National Project Team recommendations (Section 5)

National Project Team recommendations relevant to Land Registry Transaction Services have included:

Registry Information

• population in NECS of Workspaces with minimum Registry Information is to be mandatory;

• minimum Registry Information is to be the data content of the conventional Title Search available in each jurisdiction for use in populating a NECS Workspace for compliance assurance of transaction data;

• Registry Information is to consist of:

o the XML data of a conventional Title Search; o a conventional Title Search as standard or a purchase option; o end-user customer and origin authentication using digital signatures for indirect supply; o conformance with the National Electronic Conveyancing Data Standard (NECDS);

• supply of Registry Information is to be as XML data using the National Electronic Conveyancing Data Standard (NECDS);

• refresh of Registry Information after a TAC is to be optional;

• indirect supply of Registry Information6

Title Activity Check

is to be provided for on the understanding that it is to be made available to Subscribers as Land Registries and Information Brokers become capable of servicing it.

• a Title Activity Check (TAC) service is to be available following supply of Registry Information to ensure refresh of Registry Information can be requested whenever necessary;

• the TAC is to be available as an alert service from the Land Registry for a finite period after last supply of Registry Information and on request;

• each Workspace Population is to be bundled with 8 weeks of TACs.

• NECS is to provide, by polling the Land Registry, a minimum of three TACs during the lifetime of a workspace, one a week before settlement, one a day before settlement and one an hour before settlement. These automated TACs are to be able to be supplemented at any time by Subscriber-requested TACs.

Compliance Assurance

• validation of the individual data items in workspaces is to be mandatory as each item is entered or changed and also available on request as a whole-of-workspace service;

6 Registry Information products are to include means of authenticating origin and purchaser before being acceptable for indirect supply to NECS. In the meantime, Registry Information for NECS is to be sourced directly from the Land Registry until authentication arrangements are in place.






been superseded

• verification of a workspace at the Land Registry is to provide Lodgment Acceptability Assurance (LAA) using a Lodgment Acceptability Advice returned by the Land Registry in response to a Lodgment Verification prior to the scheduled settlement time;

• Lodgment Verification is to include a TAC.

2.4. Future requirements for LR Transaction Services (Section 6)

To obtain an understanding of current Land Registry transaction service requirements, the NSW Land Registry has documented the NSW conveyancing process in consultation with the NSW Law Society and undertaken analysis of search activity in relation to lodged real property transactions.

Future requirements for Land Registry Transaction Services have been identified from the NECS Roadmap documents, NPT issue papers and consultation with government and industry stakeholders in the conveyancing process.

The development and use of the National Electronic Conveyancing Data Standard (NECDS) is vital for providing all stakeholders with a common standard for data exchange necessary in preparation, settlement, lodgment and registration of real property transactions with a high degree of data accuracy, integrity and confidence.

The National Electronic Conveyancing Office (NECO), in conjunction with LIXI Limited7

Automated ‘compliance assurance on demand’ is a new service required from the Land Registry, and requires a change from a ‘read-the-manual’ model to providing business rules suited to both automated and human application.

(Lending Industry XML Initiative), mortgage industry participants and participating jurisdiction Land Registries, have been collaborating on the development of NECDS.

NECS will be licensed as an authorised Information Broker for the receipt of Land Registry Transaction Services. It is proposed that all Information Brokers meeting supply infrastructure requirements will be able to offer the proposed new Land Registry Transaction Services to their customers.

A product strategy is proposed to facilitate industry development, trialling and use of NECS compatible services for paper-based conveyancing concurrently with the implementation of electronic conveyancing.

2.5. Registry instrument templates (Section 7.1)

Development of a common NSW registry instrument schema is progressing for producing a new generation of forms suitable for automated electronic production of completed registry instruments. The schema is intended to provide forms suitable for both paper-based and electronic conveyancing. The only major difference should be the execution/signing sections of the instruments. Whereas paper instruments will continue to require wet signature execution by transacting parties, electronic instruments will be executed using a digital signature and in many instances by a representative (Representative Subscriber) of the transacting party. An initial draft of the new registry instrument schema is planned to be available for review on the LPMA website later in March 2010.

2.6. Registry Information (Section 7.2)

Registry Information is a set of information about a Land Title that is supplied by a Land Registry in an electronic format for use in Conveyancing.

7 LIXI Limited is a not-for-profit, independent, member-based industry organization established to develop e-Commerce standards and remove barriers to electronic data exchange within the Australian lending industry, see http://www.lixi.org.au/






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While Registry Information is a product for use in NECS Workspaces, it can be just as suitable for electronic preparation of registry instruments for use in paper-based conveyancing.

The features proposed for Registry Information are that it should contain:

• Land Title information (as currently available in a Title Search both as XML data and as a conventional Title Search)

• property details such as street address as recorded in the Land Registry

• the name of the party issued with the CT or holding Control of the Right-to-Deal (if Optional No-CT is introduced)

• all information provided in XML as discrete data

• data items defined using the NECDS adopted for national electronic conveyancing, and

• for data security purposes, is available only to a registered customer of an Information Broker or LPMA.

2.7. Title Activity Check (Section 7.3)

A Title Activity Check is an electronic query against a Land Title with a Land Registry to determine whether a Lodgment or Registration has occurred as regards the Land Title in a defined time period.

The proposed functionality for a Title Activity Check (TAC) is that the service can be purchased for a set period for a specified Land Title. The entity purchasing the service would have an identifier that can be used to call the Land Registry to obtain a Title Activity Report that will advise if there has been a change on the Land Title since the start of the service subscription period for the specified title.

2.8. Compliance assurance (Section 7.4)

Compliance assurance of transactions for lodgment and registration is an essential requirement for conveyancing industry participants and the Land Registry to achieve Straight-Through-Processing and rapid registration of transactions.

The NSW Land Registry services to be provided for compliance assurance are:

1. Publication of business rules for compliance assurance (to facilitate conveyancing industry participants and NECS implementation of the business rules in their systems)

2. A Lodgment Verification service containing:

2.1. calculation or confirmation of lodgment fees payable for instruments in the Lodgment Case

2.2. TAC report

2.3. Lodgment Acceptability Advice8

2.4. a Registration Compliance

9

Compliance assurance feedback information is proposed to be a listing of non-compliance with Land Registry business rules.

Report for all signed documents in the Lodgment Case

The Lodgment Verification service will include triggering of:

8 Required for NECS at a set period prior to settlement

9 The Registration Compliance Report will only be able to check those aspects of documents in a Lodgment Case suitable for automated compliance assurance and, depending on the content of the Register and characteristics of the Lodgment Case may not cover all Land Registry compliance requirements for registration.






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• calculation or confirmation of the lodgment fees10

• the Title Activity Check where this service has been purchased.

payable for instruments in the Lodgment Case

2.9. Delivery of documents (Section 7.5)

Registration of paper-based transactions in NSW currently results in original mortgages being returned to the mortgagee as an original record of the wet signature of the mortgagor.

With the acceptance of Land Registry images of original instruments as valid copies of the originals and the inclusion in electronic conveyancing of a mortgagee-signed counterpart only, the NSW Land Registry asks industry practitioners and financial institutions if there is still a need to return the original mortgage instrument to the mortgagee after registration

10 Advice of the requirement for payment of lodgment fees will be a component of the Registration Compliance Report.






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3. Specific Questions for Stakeholders

Issue 1 – Requirements for Land Registry Transaction Services

1.1 Do conveyancing industry participants prefer - consistency and compatibility between paper-based and electronic instrument templates, searches and compliance assurance to facilitate industry systems having the option of automated production of registry instruments in either medium, or - development of new LR Transaction Services for electronic conveyancing specific to the electronic conveyancing workspace environment?

1.2 Do the five services (1. registry instrument templates; 2.Registry Information; 3. Title Activity Check; 4. publication of compliance assurance rules; 5. Lodgment Verification service) satisfy industry practitioners’ and financial institutions’ need for Land Registry Transaction Services required for conveyancing using an electronic business environment?

1.3 Are the identified development objectives for LR Transaction Services appropriate (1. Automated preparation and compliance assurance processing; 2. Transitional development of systems; 3. Paper-based registry instruments compatible with electronic conveyancing)? If not, what other Land Registry objectives for Transaction Services need to be achieved for implementation of electronic conveyancing?

(Refer to section 4 Background to Land Registry Transaction Services)

Issue 2 – Requirements for exchange of information and compliance assurance rules

2.1 The NSW Land Registry proposes to develop new Transaction Services (e.g. registry instrument forms, Registry Information, Title Activity Check, Lodgment Verification) using the National Electronic Conveyancing Data Standard. Do conveyancing industry participants support this development, and are there any special considerations or requirements that need to be taken into account to meet industry’s needs for these products?

2.2 Does publication of Land Registry compliance assurance business rules in natural English for conveyancing industry participants to apply in its own systems satisfy industry needs for acquiring automatable transaction assurance rules? Do industry practitioners and financial institutions have any specific requirements for communication of Land Registry compliance assurance rules?

(Refer to section 6.1 to 6.3 of Use of Land Registry Transaction Services)






been superseded

Issue 3 – Implementation strategy for LR Transaction Services

3.1 Do conveyancing industry participants support the channel delivery strategy for LR Transaction Services where the new LR transactions services are available through NECS and through (other) authorised Information Brokers having the required delivery infrastructure? If not, how should the strategy be changed?

3.2 Do conveyancing industry participants support the Land Registry proposal for progressive development of products for Land Registry Transaction Services concurrently with implementation of electronic conveyancing? How could this proposal be improved?

3.3 Is it likely industry practitioners and financial institutions will utilise the products 1 to 5 (1. registry instrument schema and data standard; 2. XML Registry Information; 3. Title Activity Check; 4. Transaction Assurance Business Rules; 5. Registry instrument compliance assurance) for paper-based conveyancing concurrently with implementation of electronic conveyancing? If so, are there any specific implementation requirements that need to be addressed?

(Refer to section 6.4 and 6.5 of Use of Land Registry Transaction Services)

Issue 4 – Requirements for registry instrument templates

4.1 Do conveyancing industry participants support the NSW Land Registry approach of using a common schema to ensure consistency across all instrument types and simplify the extensibility of electronic conveyancing to all instrument types?

4.2 Can industry practitioners and financial institutions use a common standardised registry instrument template for each registry instrument type? This means eliminating forms customised for a specific industry practitioner or financial institution. Are there any special requirements necessary to achieve this goal?

4.3 Operative Words on each instrument type will be standardised for all users for paper and electronic environments. Can industry practitioners and financial institutions work with this constraint, or will it be necessary to incorporate a limited size (say 500 characters) variable data field for terms and conditions to be associated with the Operative Words?

4.4 How much time will financial institutions require to transition to standardised Operative words on NSW registry instruments?

4.5 In what formats should the NSW Land Registry produce its new registry instrument templates e.g. XHTML or XML compliant MSWord or Adobe Acrobat?

4.6 Will industry practitioners and financial institutions use the NSW LR’s new XML forms in their in-house systems, or will they use the LR schema to build their own templates?

(Refer to section 7.1 Registry instrument templates)






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Issue 5 – Requirements for Registry Information

5.1 What data content is required in a Registry Information product? – Is the information set indicated as “Essential” in the Requirements column in Appendix D sufficient? Industry participants are invited to provide justification of any varied or additional data requirements specification for inclusion in Registry Information (see section 7.2 for details of scope of Registry Information).

5.2 When is it envisaged industry participants will need/use Registry Information: 5.2.1 in the business environment for - electronic conveyancing only, or - both electronic and paper based conveyancing? 5.2.2 at what point in the workflow will it be used - prior to creating or using a NECS Workspace or - only in a NECS Workspace - in the industry participant’s system for both electronic and paper-based transactions?

5.3 Should the Land Registry digitally sign the Registry Information for authentication purposes?

5.4 Should a purchaser be enabled to take Registry Information into a NECS Workspace?

5.5 Should a conventional search be bundled with Registry Information?

5.6 Should a Title Activity Check Subscription be bundled with Registry Information?

5.7 Should the information search customer self-determine product bundling (i.e. a Conventional Title Search, Registry Information, and Title Activity Check Subscription individually or together) at time of ordering?

(Refer to section 7.2 Registry Information)

Issue 6 – Requirements for Title Activity Check

6.1 For what reasons would the NSW Land Registry proposal for a reactive Title Activity Check not be suitable?

6.2 What information should be contained in the Title Activity Report received in response to a request for a Title Activity Check?

6.3 What is the appropriate subscription period and limit on number of calls to the Land Registry for a TAC product?

6.4 Should the start time/date for the TAC be: (a) auto specified by the date/time of the purchase/issue of the TAC product, or (b) specified by the purchaser in the purchase request for the TAC

6.5 Should the TAC Subscription be bundled with Registry Information?

6.6 Is the proposed product structure reasonable? If not, why not?

(Refer to section 7.3 Title Activity Check)






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Issue 7 – Requirements for compliance assurance

7.1 Are the Land Registry compliance assurance services listed in 1.2 and 2.1 to 2.4 above sufficient and useful for (a) electronic conveyancing, (b) paper-based conveyancing? If not, how could the proposed services be improved?

7.2 Do conveyancing industry participants support a transition approach to development and implementation of a Land Registry compliance assurance service? If not, what strategy of implementation should be used by the NSW Land Registry?

7.3 Would conveyancing industry participants use a Lodgment Verification transaction service for paper-based registry instruments?

7.4 What content and format of compliance feedback is required by conveyancing industry participants for advice of compliance assurance of transaction?

(Refer to section 7.4 Compliance assurance)

Issue 8 – Requirements for delivery of documents

8.1 Does the Land Registry need to return original registered mortgage documentation to the mortgagee? If so, why?

(Refer to section 7.5 Delivery of documents)






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4. Background to Land Registry Transaction Services

4.1. Land Registry Transaction Services for conveyancing

Land Registry Transaction Services are currently used by conveyancing industry participants for risk management, to obtain information necessary for preparing and completing conveyancing transactions, and also for other purposes11

An example of the risk management practices required was given when His Honour Callinan J. in Black v Garnock

not addressed in this paper.

12

Electronic conveyancing provides the opportunity to address the second point above by presenting the transaction for lodgment with the Land Registry immediately following a successful electronic settlement.

observed that prudent conveyancing practice once dictated that conveyancing professionals acting for a purchaser effect settlement “simultaneously with a search of the Register, to verify that no other such caveat or record of dealing had been lodged as might obstruct, delay or detract from the registration of their clients' instruments to perfect their estates or interests.” He also suggested that “Settlement occur at the registry where instruments could be lodged without delay and the risk of competing interests being lodged in priority to the client’s interest”.

This consultation paper only considers services that relate to real property transactions intended to be presented for registration with the Land Registry.

The categories of relevant current LR Transaction Services are tabulated below.

Existing Land Registry Transaction Services

Transaction service Description

Registry instrument forms

A template in electronic and hardcopy format used to create a legal instrument that documents a transaction and is used to effect a change on the Torrens Title Register for the documented transaction, e.g. Transfer form 01T (see http://rgdirections.lands.nsw.gov.au/interactive_rpa_dealing_forms )

Information services NSW Land Registry real property information such as Land title and historical searches, copies of registered instruments, CT inquiry, water utility, CRR13 and other searches necessary for due diligence activities for a transacting party, and for preparation and compliance assurance of transaction documentation (see http://www.lands.nsw.gov.au/land_titles/property_search )

Registrar General’s Directions

Publication of the NSW Land Registry legal and practice requirements necessary for a transaction to be in order for registration ( see http://rgdirections.lands.nsw.gov.au/land_dealings )

Registry instrument instruction sheets

Publication of NSW Land Registry requirements and guidance for preparing a registry instrument suitable for lodgment and registration, e.g. Transfer form 01T – Instructions for Completion

(see http://rgdirections.lands.nsw.gov.au/interactive_rpa_dealing_forms )

11 NSW market research in 2006 indicated search purposes not directly related to real property transactions for registration such as property development, valuations, insurance, credit checks, stressed asset monitoring, debt recovery, media research and investigations. 12 Black v Garnock [2007] HCA 31 at paras 52 & 53

13 The Central Register of Restrictions (CRR) provides prospective purchasers with a single point of enquiry about government or authority interests in a parcel of land






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The business purpose for both current and future Transaction Services has been identified by the LPMA NECS Readiness Program as follows:

1 Information services relevant to paper and electronic conveyancing showing details of ownership, interests in Land, constraints and other information relating to the property for:

1.1 due diligence investigation of the Land Title and liability checks by transacting parties

1.2 validating the integrity of information for transaction contract and

1.3 automated registry instrument preparation

2 Templates for preparing registry instruments in registrable format

3 Business rules and services for compliance assuring registry instruments and the Lodgment Case to be presented for registration

4 A final Title Search prior to settlement as a due diligence check on each Land Title in the transaction to protect the equitable interest of a transacting party by identifying any changes on a Land Title since the last Title Search was obtained and issued.

Currently the NSW Land Registry does not provide a pre-lodgment service for compliance assuring instruments or lodgment cases, other than by the publication of as current Registrar’s Directions and registry instrument instruction sheets. All due diligence and compliance assurance checks are expected to be done manually by the industry practitioner, the transacting party or an agent associated with the transaction.

4.2. Future requirements for Transaction Services

Transaction Services need to be designed to support the electronic conveyancing process in a manner that maximises its efficiency and cost effectiveness for all stakeholders and provides for consistency between paper and electronic conveyancing. This is a fundamental requirement identified by the NSW Land Registry as a result of undertaking the Economic Appraisal of Electronic Conveyancing in NSW14

To achieve this goal, the NSW Land Registry has been consulting with stakeholders and analysing the future requirements for Transaction Services necessary to satisfy industry’s needs for an efficient conveyancing process using an electronic business environment.

in 2008.

The analysis has identified that enhanced Transaction Services will be required from the Land Registry, not only for provision to NECS, but to industry practitioners for use in their in-house systems prior to populating a NECS Workspace. This is necessary because transaction information collection by industry practitioners commences early in the conveyancing process. Information services and compliance information from the Land Registry is therefore required in the initial stages and is carried forward in the conveyancing process and used to populate registry instruments in documenting a transaction.

LPMA’s analysis of industry’s existing document preparation15 activities shows that a majority16

14

of registry instruments lodged in NSW are prepared using in-house software systems. These systems use forms developed and maintained in-house to prepare instruments by populating them with transaction data from in-house industry practice management or customer relationship management systems.

http://necsnsw.lands.nsw.gov.au/__data/assets/pdf_file/0012/100056/NECS_KPMG_final_report_Jan_2009.pdf

15 In 2005 the NSW Land Registry carried out a detailed analysis of instrument forms presented for lodgment. This analysis included identifying the licensed template used for each instrument, which in turn provided information on how the registry instrument was prepared. 16 The 2005 survey indicated that 67% of registry instruments are prepared using in-house case management systems.






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Only 33% of registry instruments lodged use the electronic template provided by the NSW Land Registry. Some of these registry instruments are completed on the LPMA website, and some use forms downloaded on to the industry user’s system where they are used to prepare the instruments as required.

For the foreseeable future, industry systems will need to produce both electronic and paper instruments including during the transition period until most instruments are prepared using NECS. This transition is forecast to take around ten years. For this reason, the NSW Land Registry sees there is an operational necessity of making sure that registry instruments for paper-based conveyancing are entirely consistent and compatible with electronic instruments. In this way, industry practitioners will be able to build their systems in a manner that allows them the option of producing a paper-based instrument if the transaction characteristics are not suitable17

Efficient industry systems used in the conveyancing process will need good interoperability and collect data once, at source, so that it can be re-used in subsequent document preparation and verification activities.

for using electronic conveyancing and NECS.

Elimination of manual re-entry of information (duplicated data capture) is an important business requirement for the transaction documentation stage of the conveyancing process. This same conclusion was reached and reported in the evaluation of a pilot18

The NSW Land Registry’s objectives are therefore to provide conveyancing industry participants with Transaction Services that will support:

of components of the electronic conveyancing system for HM Land Registry (England and Wales) which states as a Key Finding: Conveyancer users found the time taken double keying data on their case management systems and also on Chain Matrix and the low number of other users as factors preventing them entering transactions.

• effective and efficient preparation of instruments for settlement and lodgment in both a paper and electronic environment

• automated straight-through-processing for industry practitioners and financial institutions by maximising the ability to automate collection and compliance assurance of transaction information at source, eliminating the need to re-capture or re-work data during the conveyancing process;

• development of systems and services that use the National Electronic Conveyancing Data Standard (NECDS) to support industry transition to electronic conveyancing;

• electronic preparation of paper-based registry instruments that are compatible with systems required for electronic conveyancing.

More detailed information on NECS requirements for Transaction Services is contained in section 6 of this paper.

4.3. National proposals for Land Registry Transaction Services

The independent risk assessment of NECS developed a detailed risk register and a set of performance objectives for a risk management regime. This set included the objective of NECS achieving: assurance that all legal and regulatory mechanisms preventing, mitigating or allocating risks are applied consistently and provide clear and specific guidance to participants. LR Transaction Services are critical for satisfying this objective.

17 For example, electronic conveyancing requires that all instrument types and all parties involved are able to transact in an electronic environment using NECS. If for any reason, any part of the transaction has to use a paper instrument, then the whole transaction (i.e. all instruments) has to be on paper. 18 See the England & Wales Land Registry Chain Matrix Prototype Evaluation Report at http://www1.landregistry.gov.uk/assets/library/documents/T1%20Final%20Evaluation%20Report%20v1.5.pdf






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National consultation has involved the Land Registry State Project Teams19 (SPT) and National Project Team20 (NPT) identifying the detailed requirements for Land Registry Transaction Services through consideration of the NECS Requirements Definition and issue papers21

• Workspace Creation (29/5/2009)

presented to the NPT covering the subjects of:

• Workspace Population (29/5/2009) • Transaction Assurance (29/5/2009) • Lodgment Acceptability (29/5/2009).

The subject matters covered in these issue papers was picked up and developed in the following Transaction Assurance issue papers:

• Transaction Assurance Refined (13/7/2009) • Transaction Assurance Further Refined (31/7/2009) • Further Transaction Assurance Matters (15/01/2010).

All these NPT issue papers are concerned with determining the requirements for information and compliance services for NECS only. The NSW Land Registry has been looking at requirements that will satisfy both electronic conveyancing and the residual paper-based conveyancing in NSW.

NSW consultation on NECS has so far identified five services required for implementation of electronic conveyancing:

1. Registry instrument templates with an XML data requirement defined in NECDS to be used for automated preparation and rendering of variable data together with fixed text in a standard format to create the legal form of an instrument for human or electronic interpretation of transaction information for registration.

2. Registry Information that can be obtained independently of a NECS Workspace and contains discrete XML title data equivalent to a Title Search necessary for use in populating and validating electronic documents for a Lodgment Case.

3. Title Activity Check (TAC) service that can be called at the Land Registry to inform the NECS Workspace, in which the purchaser of the TAC service is a participating Subscriber, whether a change has occurred on a specific title reference during the subscription period for the service.

4. Compliance assurance comprising:

4.1 publication of compliance assurance business rules suitable for conveyancing industry participants and NECS to consistently implement in their practices and systems for preparation and verification of registry instruments for lodgment and registration in NSW, and

4.2 Provision of a Lodgment Verification compliance assurance service at the Land Registry that can be called for compliance assurance of a Lodgment Case in a NECS Workspace prior to lodgment with the Land Registry.

Consultation also suggests that there may no longer be a requirement for the Land Registry to return the original mortgage to the Lodging Party after registration. The NSW seeks industry confirmation (or otherwise) on this matter.

19 Each of the eight State and Territory jurisdictions participates in the SPT meetings contributing to the development of NECS, see http://www.necs.gov.au/State-Project-Teams/default.aspx . 20 The National Project Team involves stakeholder representatives from industry and government stakeholders. The charter and membership details are available at http://www.necs.gov.au/National-Project-Team/default.aspx 21 NECO NPT issue papers can be found at http://www.necs.gov.au/Issue-Papers/default.aspx






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Issue 1 – Requirements for Land Registry Transaction Services

1.1 Do conveyancing industry participants prefer - consistency and compatibility between paper-based and electronic instrument templates, searches and compliance assurance to facilitate industry systems having the option of automated production of registry instruments in either medium, or - development of new LR Transaction Services for electronic conveyancing specific to the electronic conveyancing workspace environment?

1.2 Do the five services (1. registry instrument templates; 2.Registry Information; 3. Title Activity Check; 4. publication of compliance assurance rules; 5. Lodgment Verification service) satisfy industry practitioners’ and financial institutions’ need for Land Registry Transaction Services required for conveyancing using an electronic business environment?

1.3 Are the identified development objectives for LR Transaction Services appropriate (1. Automated preparation and compliance assurance processing; 2. Transitional development of systems; 3. paper-based registry instruments compatible with electronic conveyancing)? If not, what other Land Registry objectives for Transaction Services need to be achieved for implementation of electronic conveyancing?

5. National Project Team Recommendations on Transaction Services

The National Project Team (NPT) directly represents government and industry to ensure the requirements of all stakeholders are integrated successfully within NECS. The role of the team is to make recommendations to the National Steering Committee on NECS system requirements, business practices, supporting arrangements, risk management, and implementation planning.

The NPT Charter22 details the team’s purpose, composition, procedures and commitments. The NPT Work Program details the team’s specific tasks, timings and outcomes. Currently, the principal purpose of the NPT is to guide specification of systems and practices for NECS.

Functional requirements for transaction assurance have been considered in a series of issue papers presented to the National Project Team (NPT) at meetings on 25 August 2009 and 9 February 2010. The resolutions afreed at these meetings have been summarised by the NSW Land Registry in relation to each of the Transaction Services products considered in this consultation paper.


• population in NECS of Workspaces with minimum Registry Information is to be mandatory

• minimum Registry Information is to be the data content of the conventional Title Search available in each jurisdiction for use in populating a NECS Workspace for compliance assurance of transaction data

• Registry Information is to consist of:

o the XML data of a conventional Title Search o a conventional Title Search as standard or a purchase option o end-user customer and origin authentication using digital signatures for indirect supply

22 The NPT Charter and Work Program can be found at http://www.necs.gov.au/National-Project-Team/default.aspx






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o conformance with the National Electronic Conveyancing Data Standard (NECDS)

• mandatory Workspace Population is to occur when a participating Subscriber has identified the jurisdiction and at least one valid title reference, with the addition of further title references to cause additional mandatory Workspace Populations

• provision of additional Registry Information including a conventional Title Search as a single data item is to be optional

• supply of Registry Information to populate workspaces is to be directly from the Land Registry in the first instance

• supply of Registry Information is to be as XML data using the National Electronic Conveyancing Data Standard (NECDS)

• refresh of Registry Information after a TAC is to be optional

• indirect supply23 of Registry Information is to be provided for on the understanding that it is to be made available to Subscribers as Land Registries and Information Brokers become capable of servicing it24


.

• a Title Activity Check (TAC) service is to be available following supply of Registry Information to ensure refresh of Registry Information can be requested whenever necessary

• the TAC is to be available as an alert service from the Land Registry for a finite period after last supply of Registry Information and on request

• each Workspace Population is to be bundled with 8 weeks of TACs.

• a uniform number or duration of TACs.

• NECS is to provide, by polling the Land Registry, a minimum of three TACs during the lifetime of a workspace, one a week before settlement, one a day before settlement and one an hour before settlement. These automated TACs are to be able to be supplemented at any time by Subscriber-requested TACs.

Compliance Assurance

• validation of the individual data items in workspaces is to be mandatory as each item is entered or changed and also available on request as a whole-of-workspace service

• verification of a workspace at the Land Registry is to provide Lodgment Acceptability Assurance (LAA) using a Lodgment Acceptability Advice returned from the Land Registry in response to a Lodgment Verification prior to the scheduled settlement time

• any change to a workspace after a successful Lodgment Verification is to negate any previous LAA

• if not requested earlier by a user, Lodgment Verification is to be mandatory no later than 72 hours prior to the scheduled settlement time

• Lodgment Verification is to include a TAC

These recommendations provide a national context for the discussion in this consultation paper on NSW LR Transaction Services.

23 Indirect supply is where a Subscriber may purchase Registry Information from their preferred Information Broker for contract preparation, and then subsequently be able to take the purchased Registry Information into the NECS Workspace when it is created for the transaction to be documented and settled using electronic conveyancing. 24 Registry Information products are to include means of authenticating origin and purchaser before being acceptable for indirect supply to NECS. In the meantime, Registry Information for NECS is to be sourced directly from the Land Registry until authentication arrangements are in place.






been superseded

6. Use of Land Registry Transaction Services

6.1. Land Registry Transaction Services used in the conveyancing process

To gain a better understanding of conveyancing activities and the requirements for Land Registry Transaction Services, the NSW Land Registry consulted with the NSW Law Society in 2007 to develop a simple description of the NSW conveyancing process. The description of the current process is shown at Annexure B together with a description of future activities expected to be required for an electronic conveyancing transaction in NSW as determined at that time.

Existing NSW Land Registry Transaction Services used in the current process are listed in the table below.

Service Transaction Use Purpose

Registry instrument forms

To prepare registry instruments to effect registration of a real property transaction at the Land Registry

Title Search 1. To identify ownership and encumbrances on title for vendor disclosure and warranties during preparation of a sale contract or processing an application for a mortgage facility

2. To carry out transaction due diligence for the transacting parties receiving

3. To prepare instruments in compliance with requirements for completion, settlement, lodgment and registration

CT inquiry To identify if and where the CT was delivered and on what transaction on title

Historical search To provide details of previous transactions on title

Registered instrument copies

To provide details of ownership, interests in Land and constraints shown on title

Other searches relevant to conveyancing

Owner Inquiry Search: to identify properties owned by a named person or organisation.

CT Inquiry Search: to identify the CT edition, production status or delivery party for a given Certificate of Title.

Land Value search: to provide land value details for a property

Street Address search: to identify the Land Title reference(s) for a given street address

Reverse Street Address: to identify the street address for a given Land Title reference

Certificate Authentication Code (CAC) Enquiry – to remotely verify the code on a NSW Security CT

Central Register of Restrictions searches

Hunter / Sydney Water searches and other property information inquiries to councils, OSR, etc

NSW Liaison with the conveyancing industry (including mortgage financing) has identified that Land Registry Transaction Services are required starting from the initial pre-contract stage of the conveyancing process through to the final settlement and lodgment of the transaction with the Land Registry. For example, Title Searches purchased by an industry practitioner or financial institution as part of the initial vendor disclosure or due diligence search information are carried forward as reference information throughout the conveyancing process.






been superseded

Land Registry analysis25

Analysis of changes to the Register also indicated that a Land Title that is subject to a settlement transaction has a 6% chance of another transaction affecting that Land Title in each of the two months prior to settlement

of search activity shows a variation in search practices presumed to be dependent on the specifics of each Lodgment Case. Some practices seem to be common across case types, for example 92% of settlement transactions in NSW are subject to a final Title Search for due diligence and compliance assurance on the day of settlement. The 8% of settlements where no final search is performed are believed to be cases where there are common parties involved in the relinquishing and receiving roles in the transaction. About a third of settlement transaction related Title Searches are purchased more than 7 weeks ahead of the settlement date.

26

Currently Title Searches in NSW are not provided as discrete data suitable for reliable automated collection and re-use in industry systems. Data capture and compliance assurance using Title Search information is done manually by industry users. An example of a conventional Title Search (for the Sydney Opera House) is included for reference at Appendix A.

. The LPMA analysis indicates the purpose of these transactions are typically cleaning-up the title ready for settlement (28% e.g. a Discharge of Mortgage, Change of Name, Withdrawal of Caveat), creation of the Land Title (27% e.g. subdivision), addition of a new interest on title (20% Transfer, Mortgage, Lease), a Transmission or Notice of Death transaction (16%) and addition of a constraint (9% e.g. a Caveat).

LPMA’s 2005 NSW forms survey identified that a variety of software is used by conveyancing industry participants for preparing and rendering registry instruments. The survey indicated the software used by industry for form templates includes Adobe Acrobat, Microsoft Word and other proprietary software formats that are primarily used by large financial institutions or mortgage processors.

A NSW Land Registry objective is to support development of an electronic conveyancing process that is suitable for “Straight-Through-Processing”27

so that savings that may be passed to landholders can be maximised. This means providing Transaction Services that are compatible with industry systems.

6.2. Land Registry Transaction Services required for electronic conveyancing process

The NECS Roadmap documents and NPT Issue Papers identify the following services required from a jurisdiction Land Registry to support documentation of transactions in NECS:

• Registry instrument templates suited to automated population and digital signing

• Business rules for the jurisdiction’s registry instruments

• Registry Information as discrete data in XML

• A Lodgment Verification service that can provide an examination compliance report and lodgment fee calculation or confirmation on demand during the preparation of a Workspace, and a Lodgment Acceptability Advice.

• A Title Activity Check to advise if there has been a change in a defined period on a Land Title specified in the transaction.

25 Internal LPMA analysis and report: Transaction Services for Electronic Conveyancing – NECS Impacts and Product Options 26 This means that there is a 12% chance of another transaction on the title in the two months prior to settlement 27 Straight-Through-Processing is end-to-end processing of automated data without manual intervention.






been superseded

These are five NSW Land Registry Information services that are required for use in a NECS workspace together with information from other sources in the documentation and compliance assurance of a transaction for lodgment with the Land Registry.

Services to the NECS Workspace

The diagram that follows gives a NSW Land Registry overview28

of the functional components and information flows necessary to document a transaction for electronic conveyancing and the deliverables created in a NECS Workspace.

Jurisdiction Register and Records

Workspace Compliance Reports

Subscriber detailsPre-registered account details

Fee Billing and Payment Collection Information

Financial Information to Populate the Settlement Certifications

Workspace Configuration Instructions

Transaction information to populate Instruments and Reports

Registry Information(Land Title Search; Land Title Data)

Noticeboard and Diary(Workspace Status; Instrument Status; Supporting Evidence; Audit

Trail for User Information; Diary for private matters)

Settlement Information

Settlement Certification

Receiver Certification Funder

Certification

Settlement Schedule(Settlement

Date/Time etc)

Lodgment Case

Discharge

Transfer

Mortgage

Lodgment Information(Order of Registration,

Jurisdiction, CORD, Responsible Subscriber, etc)

Lodgment Case data(Transacting Parties, Land

Title Reference, Participating Subscribers etc.)

Lodgment Invoice

Information Report (NOS)

Land Registry

Subscriber (Authorised

Officer)

Subscriber (User / Certifier)

SourceTransaction Information

Deliverables

NECS Workspace

TAC

Reference Information

Revenue Office Duty Verification


NECS Register(NECS Subscriber Register,

Pre-registered Financial Accounts)

Jurisdiction Content

Templates and transaction business rules

Land Registry

(Administrator)

NECS Functions

Source: LPMA

Land Registry Content

The Administrator for each jurisdiction Land Registry will provide NECS with the registry instrument templates and business rules for creating a transaction suitable for registration in the jurisdiction. The templates and rules are used when NECS configures and Subscribers populate a workspace for a transaction.

Subscriber Register

Each Subscriber (or an Authorised Officer if the Subscriber is an organisation) provides the Subscriber, User and Certifier details to the NECS Registers of Subscribers and Certifiers. The NECS Registers provide Subscriber and Certifier information for population of signing details for registry instruments and responsibility for lodgment.

Reference Information

28 Based on NSW NECS Readiness interpretation of functional descriptions published in the NECS Roadmap document






been superseded

Registry Information and information posted to the Noticeboard in the NECS Workspace are for participating Subscribers to use as reference information in preparing, monitoring and compliance assuring transactions prior to settlement and lodgment.

Workspace Deliverables

The deliverables to the Land Registry from a NECS Workspace are expected to include a Lodgment Case that contains:

a. Lodgment information that includes the Responsible Subscriber, Land Titles affected by the registry instruments in the case, CoRD information for those titles, registry instruments and information reports (NOS) in the case, their order of registration and details of the Lodgment fees collected by NECS for the case;

b. The registry instruments and information reports (e.g. NOS) for the Lodgment Case.

c. Signing compliance information provided by NECS as a result of verifying and assuring the validity of the Certifier signature at the time of signing.

Preparation of a transaction

NECS Roadmap specifies that creation of a Workspace requires the Subscriber to obtain Registry Information from the Land Registry for the Land Titles affected by the transaction. Registry Information is reference information for preparation and compliance assurance of documentation of the transaction.

The currency of the Registry Information may be verified by the Title Activity Check (TAC) with the Land Registry. A Title Activity Check (TAC) is a service that can be called at the Land Registry that informs the purchaser of the TAC service whether a change has occurred on a specific title reference in the subscription period for the service. The TAC:

• Can be initiated at any time by the user, or it is proposed that the TAC can be scheduled using functionality in NECS

• The TAC queries whether there has been any change on the specified Land Title since the specified commencement date of the subscription for the TAC.

The TAC response from the Land Registry will advise the NECS Workspace if there has been a change on the affected Land Title since the Registry Information was provided (or an earlier TAC undertaken) and the dealing or plan number of the instrument effecting the change.

NECS proposes that the TAC can be initiated at any time by a Subscriber participating in the workspace, or the TAC can be scheduled for specific times using NECS functionality available in the workspace.

Jurisdiction transaction business rules provided by the Land Registry to NECS will provide basic workspace guidance for preparing valid instruments and reports for documenting a transaction for the jurisdiction.

Compliance assurance of a transaction and determination of Lodgment fees requires the Lodgment Case to be submitted to the Land Registry for Lodgment Verification. The Land Registry will return a compliance report to the NECS Workspace indicating how the transaction complies with lodgment and registration requirements.

Prior to settlement, the Lodgment Case will be submitted to the jurisdiction Revenue Office for Duty Verification and then to the Land Registry for Lodgment Verification for the purpose of obtaining a Lodgment Acceptability Advice, Registration Compliance Report and Title Activity Check. The response from the Land Registry will be used by participating Subscribers to decide whether settlement should proceed.

It is important that Subscribers continue to make their own decisions on whether settlement of the transaction should proceed. The scope of NSW Land Registry rules enforced at Lodgment may be limited, so that requirements for electronic lodgment are consistent with the requirements for paper-based






been superseded

lodgments. However, it is the NSW Land Registry’s intention to provide a Registration Compliance Report with the Lodgment Acceptability Report.

The Registration Compliance Report received in response to a Lodgment Verification will be advisory, but important for avoiding requisitions after lodgment. Subscribers should use the Lodgment Acceptability Advice and Registration Compliance Report in making their decision on whether to proceed with settlement and/or lodgment.

This consultation paper seeks industry practitioner and financial institution feedback on their requirements or preferences for:

• Registry instrument templates • Registry Information content and service • Title Activity Check service • Lodgment Verification service, and • Business Rules publication.

The next section discusses the conceptual approach by which the NSW Land Registry and industry can achieve interoperability with a single NECS that will service all jurisdictions and conveyancing industry sectors.

6.3. Achieving interoperability for information exchange and compliance assurance

Feedback29 from NSW industry consultation30

NSW NECS Readiness Program investigation identified that adoption of a Business Rules Approach

in 2004 made it clear that industry practitioners and financial institutions required a single national electronic conveyancing system. This meant one system that can service all sectors of industry and all eight jurisdictions.

31

The approach provides business rules suited for both automated implementation and ready human consumption through its use of structured plain English language.

would provide a sound basis for common understanding and interoperability necessary for NSW participation in a national system for electronic conveyancing. An introduction to the thinking involved in a Business Rules Approach is provided at Appendix C.

The foundation of a Business Rules Approach is a Structured Business Vocabulary32 (SBV) which contains the vocabulary (terms33

Existing conveyancing terminology has developed naturally in each jurisdiction and each sector of industry. This has meant that terms and their meanings often differ between jurisdictions, industry sectors and stakeholders. A SBV contains definitions of the concepts and the associated terms used to name those

) and their definitions used to describe the practices and information required for documenting and processing real property transactions.

29 Public Consultation Document Feedback Report http://necsnsw.lands.nsw.gov.au/__data/assets/pdf_file/0008/99962/PCD_Feedback_Report.pdf 30 Electronic Settlement, Electronic Lodgment and Automated Registration of Real Property Dealings in NSW http://necsnsw.lands.nsw.gov.au/__data/assets/pdf_file/0007/99961/Public_Consultation_Document.pdf 31 The Business Rules Approach is an approach to system development in which business rules are: explicitly documented in natural language (business English) using rule statement templates and terms from a structured business vocabulary; documented separately from processes and data; recorded in a single repository; published to all stakeholders 32 A Structured Business Vocabulary is the set of terms used by the business, each with a definition and any synonyms, arranged in a term taxonomy, and the fact types that describe the relationships between those terms 33 A term is a word or expression used as a name for some particular thing.






been superseded

http://necsnsw.lands.nsw.gov.au/__data/assets/pdf_file/0008/99962/PCD_Feedback_Report.pdf�

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concepts. The terms listed include synonyms (i.e. different terms that have the same meaning) and antonyms (i.e. the same term that has different meanings in different jurisdictions or business sectors).

The SBV contains the relationships34

between the terms (concepts) and it is the combination of the terms, definition of concepts and their relationships that provide the semantic framework for a common business system. As all Land Registries are conceptually involved in the same registration business, it is the SBV that provides the key to developing a national data standard that can be readily extended to provide for all stakeholders in electronic conveyancing and future extension to accommodate all registry instrument types.

National conveyancing information exchange

The LPMA NECS Readiness Program in NSW has been identifying and documenting the vocabulary used by the NSW Land Registry35

The development and use of the NECDS is vital for providing all stakeholders with a common standard for data exchange necessary for information processing in preparation, settlement, lodgment and registration of real property transactions. The NECDS is essential for conveyancing industry participants, NECS and government agencies to exchange transaction information with a high degree of data accuracy, integrity and confidence.

. It has also been contributing to the development of a National Electronic Conveyancing Data Standard (NECDS) which contains a proposed common vocabulary and a mapping to the terms used in each jurisdiction. The NSW SBV will include the NECDS so that data items can be mapped between the NSW and national terminology for data exchange transformation.

The National Electronic Conveyancing Office (NECO), in conjunction with LIXI Limited36

The NSW Land Registry proposes to use the NECDS in the development of its enhanced Transaction Services. In this way NSW can provide services that can be used for preparation of registry instruments for existing paper-based conveyancing, as well as being compatible with development of new industry systems that will be required for electronic conveyancing.

(Lending Industry XML Initiative), mortgage processing industry participants and participating jurisdiction Land Registries, have been collaborating on the development of this national data standard for electronic conveyancing (NECDS). NECDS will re-use as much as possible existing LIXI data standard content, extending it as necessary for electronic conveyancing. A first draft of the requirements for NECDS has been developed and is currently being reviewed by stakeholders.

Compliance assurance

Compliance assurance means determining the validity of information by the application of business rules. Sets of business rules apply to preparing a complying transaction in NECS. Each set of business rules is defined by a regulatory authority that has jurisdiction over the setting and requirements for application of

34 These relationships are technically known as ‘fact types’. A set of terms and fact types is technically known as a ‘fact model’.

35 An early draft version of the NSW Land Registry Structured Business Vocabulary was published on the LPMA website in June 2009 to provide stakeholders with information on the approach being taken by the NSW Land Registry –see http://necsnsw.lands.nsw.gov.au/__data/assets/pdf_file/0011/100055/NSW_LR_Structured_Business_Vocabulary_June_10_2009.pdf .

36 LIXI Limited is a not-for-profit, independent, member-based industry organization established to develop e-Commerce standards and remove barriers to electronic data exchange within the Australian lending industry, see http://www.lixi.org.au/






been superseded

http://necsnsw.lands.nsw.gov.au/__data/assets/pdf_file/0011/100055/NSW_LR_Structured_Business_Vocabulary_June_10_2009.pdf�


http://www.lixi.org.au/�

those rules. Transaction Assurance is the processes and services provided in NECS to assure the compliance of a Transaction with requirements37

NSW Land Registry considers that compliance assurance concerns two service dimensions:

from applicable rules.

1. The publication of Land Registry compliance assurance business rules for conveyancing industry participants and NECS to consistently implement in their practices and system for preparation and verification of registry instruments and associated reports for lodgment and registration in NSW, and

2. Provision of an automated Lodgment Verification compliance assurance service at the Land Registry that can be called for automated compliance assurance of a Lodgment Case prior to lodgment with the Land Registry.

Automated ‘compliance assurance on demand’ is a new service for the Land Registry, and requires a change from a ‘read-the-manual’ model to providing transaction assurance rules suited to both automated and human application.

Transaction Assurance is achieved by applying business rules to the transaction information as it is prepared, settled, lodged and examined for registration.

Business rules can be applied manually, as is the case at present by industry practitioners and Land Registry examiners, or automatically by electronic systems used in the conveyancing and registration process. Regardless of whether a rule is applied manually or electronically, the semantics (meaning) of the business rule is the same, it is just the rule statement38

Land Registry business rules are currently published in the Registrar General’s Directions and instructions for preparation of registry instruments..

that may be different. For example a business rule for manual application will be written in the relevant business English, while the electronic rule statement is likely to be written in computer programming code.

Re-work of transaction information needs to be eliminated if the goal of effective and efficient automated straight-through-processing is to be achieved. Compliance assurance of Lodgment Cases through the automated application of business rules is essential to ensure the achievement of Straight-Through-Processing.

The diagram below shows how Land Registry business rules can be used throughout the conveyancing process. As automation of conveyancing systems develops, the ability to communicate and apply business rules in a consistent manner grows in importance

37 Section 10 Business Rules in the National Business Model v10 150607 describes the ten sets of business rules that apply for transaction assurance in NECS (see http://www.necs.gov.au/NECS-Roadmap-Documents/default.aspx )

38 A rule statement is any way that the rule can be written. The phraseology or the language used to describe a business rule can be different, but the semantics (meaning) of the rule is the same.






been superseded

http://www.necs.gov.au/NECS-Roadmap-Documents/default.aspx�

Transaction Assurance Using Land Registry Rules in the Electronic Conveyancing Process

Transaction schema

validation

Client SubscriberPaper & electronicdocuments

Collection of Client

information and transaction instructions

Client Identity

Verification and Client

Authorisation

Pre-contract activities

Contracts exchanged

Rules purpose

Where rule set is

implemented

NECS, LSP practice guidelines

NECS, LSP or Subscriber practice support system

Examination rules for industry (Subscribers, Certifiers)

Instrument preparation in

case management

system

Lodgment check and compliance

report

NSW specific compliance requirements

Subscriber or LSP case management system

Case schema validation

Subscriber or LSP case management system

National Electronic Conveyancing Data Standard (NECDS)

Workspace instrument & report validation and verification

NECS workspace

Land Registry lodgment check and compliance advice

Land Registry lodgment service

Land Registry compliance check for registration

Assisted or automated electronic examination and registration

Master repository for all Land Registry business rules, their subsets and other information necessary for preparing, lodging, compliance assuring and registering a real property transaction with the Land Registry

Repository includes structured business vocabulary, all business rules and meta data for management and implementation of rules.

NECS

Transaction and case data

validation and verification

Certifier

Document examination

and instrument certification

Land Registry

Examination and registration

Electronic data Electronic caseof documents

The Business Rules Approach adopted by the NSW Land Registry uses business English39 to provide the common language in which all business rules will be written. The standard adopted is the OMG40

To standardise syntax used in defining the business rules for the NSW Land Registry, a set of standard rule statement templates

international standard on Semantics of Business Vocabulary and Business Rules (SBVR). Specifying the terminology, definitions and business rules in natural business English provides a common means for communicating and agreeing business rules with all stakeholders including a means of communicating the rules to the IT community that have the task of implementing the rules electronically to automate business processes.

41

To assist in aligning NSW terminology and rules with national requirements, the Land Registry has acquired a software tool that allows documentation and sharing of the structured business vocabularies and business rules across different communities. Access to this software tool is being made available to other jurisdictions to assist with mapping jurisdiction vocabularies with a national standard. Major industry

was developed for documenting business rules. This will simplify and facilitate the documentation of business rules in a consistent manner.

39 The NSW Land Registry has adopted the OMG international standard on Semantics of Business Vocabulary and Business Rules (SBVR) version 1.0 which can be found at http://www.omg.org/spec/SBVR/1.0/ .

40 The Object Management Group (OMG) is an international, not-for-profit computer industry standards setting organisation. See http://www.omg.org/

41 The standard Business Rules Statement Templates developed to June 2009 are published on the LPMA website at http://necsnsw.lands.nsw.gov.au/__data/assets/pdf_file/0018/103428/Business_Rule_Statement_Templates_June_10_2009v2.pdf . This may appear to be a daunting document to the lay reader, but is one of a set of resource documents developed to ensure the application of a robust development methodology by the NSW Land Registry.






been superseded

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organisations interested in using this tool are invited to contact the NSW Land Registry for further discussion on this matter.

Issue 2 – Requirements for exchange of information and compliance assurance rules

2.1 The NSW Land Registry proposes to develop new Transaction Services (e.g. registry instrument forms, Registry Information, Title Activity Check, Lodgment Verification ) using the National Electronic Conveyancing Data Standard. Do practitioners and financial institutions support this development, and are there any special considerations or requirements that need to be taken into account to meet industry’s needs for these products?

2.2 Does publication of Land Registry compliance assurance business rules in natural English for conveyancing industry participants to apply in its own systems satisfy industry needs for acquiring automatable transaction assurance rules? Do industry practitioners and financial institutions have any specific requirements for communication of Land Registry compliance assurance rules?

The next section discusses the channels through which the new products can be made available.

6.4. Channels for access to Transaction Services

Information services are currently available:

• from the Land Registry in hard-copy format over-the-counter

• remotely in electronic format from:

o information brokers o the LPMA website

All of the new Transaction Services products are suited to electronic delivery channels. However, there are Land Registry risk management requirements that mean some products may not be made available via the LPMA website. The NSW Land Registry does not propose restrictions on who can access the new products, but does require that they be supplied to known customers in a manner that ensures that the terms of sale and conditions of use can be enforced.

Key risk issues for the Land Registry are:

• The conveyancing industry and the community rely on the accuracy of information provided. The Land Registry therefore requires a distribution network that can be relied upon to retain the integrity and approved use of information supplied.

• Information is only valid at the time of issue. The Land Registry therefore requires a process that will ensure the customer knows the currency (or otherwise) of information obtained.

• Compliance assurance services (such as the TAC and Lodgment Verification) require a delivery process that will ensure the integrity of ongoing use of these services.

NECS is expected to provide the new electronic lodgment channel for the NSW Land Registry. It is also expected that in NSW NECS will complete the requirements to be classified as an authorised Information Broker for the supply of LR Transaction Services.






been superseded

There may be some specific infrastructure requirements for supply of the new LR Transaction Services. It is proposed that in NSW all Information Brokers meeting the Land Registry’s infrastructure requirements will have opportunity to offer the new services.

The following table sets out the Land Registry proposed delivery channels for the new products:

Transaction Services Information Brokers42 LPMA Online Shop43 Over-the-Counter

Registry instrument templates

Yes Yes N/A44

Registry Information Yes - -

Title Activity Check Yes - -

Lodgment Verification Yes - -

Published compliance assurance rules

Yes Yes Yes

Section 7 of this paper contains more information on the specification of new Transaction Services which will provide context for the delivery channels proposed by the Land Registry.

6.5. Strategy for implementation of Transaction Services

The NSW Land Registry proposes to take a transition approach to the implementation of Transaction Services for electronic conveyancing. This means implementing electronic conveyancing compatible services that can also be utilised in preparing paper-based transactions. This will provide conveyancing industry participants and the Land Registry with the opportunity for incremental benefits from:

• collaboration on implementation of Transaction Services for use in an electronic business environment

• progressive development of systems necessary for electronic conveyancing rather than a “big-bang” approach

• early realisation of benefits from use of service components necessary for electronic conveyancing.

In planning the implementation of electronic conveyancing, the NSW NECS Readiness Program proposes a staged development and implementation of Transaction Services that will provide industry practitioners and financial institutions with the opportunity to pilot the use of these services concurrently with

42 NECS is expected to complete the relevant requirements in each jurisdiction to be treated as an authorised Land Registry Information Broker, in line with the NPT determination that ‘NECS is not to … receive title and other registry information from any Land Registry on more favourable terms than Licensed Information Brokers in the jurisdiction’. See http://www.necs.gov.au/default.aspx?ArticleID=507#licensedserviceproviders . 43 See LPMA Online Shop at http://six.lands.nsw.gov.au/wps/portal/lpionline/menu.pl . LPMA Online Shop does not generally provision for registration of known customers for conveyancing search transactions at this time.

44 Electronic Registry Instrument templates for NECS are intended for digital signing and are not suitable for use in the paper conveyancing environment. However, XML data-schema based Registry instrument templates suited to automated population and wet signing are proposed to made available through the LPMA website for use in the paper conveyancing environment. Printed versions of these forms will be available for the very small number of registry instruments that are prepared at the Land Registry by hand.






been superseded

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implementation of electronic conveyancing in NSW. This staged development is shown schematically below.

3. Title Activity Check transaction4. Transaction Assurance business rules5. Instrument compliance verification service6. Nos verification service

1. Registry Instrument forms using NSW XML data schema2. NSW XML Registry Information

Tranche 2Tranche 1

7. Lodgment Case verification8. Instrument data collection service

Tranche 3

9. Duty verification service (if required )10. Workspace verification11. Electronic Lodgment facility12. Electronic Examination

Tranche 4

13. Automated Registration14. Straight through processing

Tranche 5

The transition-based approach is intended to minimise re-work of system development and maximise re-use of application components being developed to service the conveyancing industry. The proposed development sequence is as follows:

Change grouping

Transition to products and services Potential benefits / comments

Tranche 1 (target 2010)

1. Registry instrument schema and NSW data standard (for use in electronic templates for paper forms as well as for later use as NSW electronic instruments)

2. XML Registry Information (for provision to conveyancing industry participants to use in preparing and validating paper or electronic registry instruments)

Concurrent release of XML, NECDS-based instrument forms and search types provides pre-NECS opportunity for - automated form population and case

monitoring arrangements - implementation of NECDS-based

instrument schemas in documentation systems

Tranche 2 (target 2011)

3. TAC (Title Activity Check) service development and implementation (for offering as a new fee-for-service information product by the Land Registry that will also be incorporated in to the Lodgment Verification service)

4. Transaction assurance business rules (published for implementation and testing in items 5 and 6 below)

5. Registry instrument compliance assurance service function using the transaction assurance business rules in 4. above (for use by the Land Registry and conveyancing industry participants for compliance assurance of a registry instrument)

6. NOS verification assurance service.

Release within a scheduled period of XML, NECDS-based NSW LR business rules for instrument compliance, and a NSW LR portal to receive individual populated instruments and provide ‘compliance advice’ reporting (full compliance checks will require the complete Lodgment Case in 7 below), - encourages conveyancing industry

participants engagement with ‘compliance assurance’ developments and transactions as will be used in NECS, and

- offers the opportunity to reduce the incidence of requisitions

Tranche 3 (target TBA)

7. Lodgment case verification service 8. Instrument data verification and collection

service

The predecessor for the Lodgment Verification which will facilitate development of the compliance assurance for implementation in NECS and industry






been superseded

Change grouping

Transition to products and services Potential benefits / comments

systems. Provides opportunity for LPMA ‘data capture’ and trial implementation of Electronic Examination for paper-based instruments concurrently with NECS.

Tranche 4 (NECS ops day 1)

9. Use (if required )of Duty Verification assurance service developed by OSR for use by NECS in Workspace Verification to automate duty compliance assessment of registry instruments at Lodgment

10. Lodgment Verification service (includes Lodgment Assurance Advice) function currently proposed for NECS

11. The electronic lodgment function necessary to receive and automatically lodge cases of electronic instruments from NECS

12. Electronic Examination

Lodgment Verification and Electronic Lodgment is required for Day 1 of operation of NECS. Electronic examination will re-use Lodgment Verification business rules

Tranche 5 13. Automated Registration 14. Straight-Through-Processing

Post day 1 of NECS.

The NSW Land Registry seeks industry practitioners and financial institutions feedback on the proposed transition strategy and the implementation and use of Transaction Services during the transition period to implementation of electronic conveyancing.

Issue 3 – Implementation strategy for Land Registry Transaction Services

3.1 Do conveyancing industry participants support the channel delivery strategy for LR Transaction Services where the new LR transactions services are available through NECS and through (other) authorised Information Brokers having the required delivery infrastructure? If not, how should the strategy be changed?

3.2 Do conveyancing industry participants support the Land Registry proposal for progressive development of products for Land Registry Transaction Services concurrently with implementation of electronic conveyancing? How could this proposal be improved?

3.3 Is it likely industry practitioners and financial institutions will utilise the products 1 to 5 (1. registry instrument schema and data standard; 2. XML Registry Information; 3. Title Activity Check; 4. Transaction Assurance Business Rules; 5. Registry instrument compliance assurance) for paper-based conveyancing concurrently with implementation of electronic conveyancing? If so, are there any specific implementation requirements that need to be addressed?






been superseded

7. Specification of the LR Transaction Services Required

This section of the consultation paper describes and invites conveyancing industry participants’ comment on the specification of future Transaction Services to be provided for conveyancing.

The services described are:

7.1 Registry instrument templates 7.2 Registry Information 7.3 Title Activity Check 7.4 Compliance assurance45

7.5 Delivery of documents.

The proposals are based on the assumption of the Land Registry providing Transaction Services that support both electronic and paper-based transactions to achieve the greatest business benefit in the future.

7.1. Registry instrument templates

There are currently 83 different forms for preparing paper-based registry instruments for lodgment with the NSW Land Registry. NECS Readiness Program analysis of existing forms and development of the NSW SBV identified that there are a significant number of common data elements used across many registry instruments. As a result of this, the NSW Land Registry is proceeding on the basis that it should be possible to accommodate all registry instrument types within a common schema for NSW. Each instrument type will use a combination of common elements and some specific elements as required within the common schema.

The data elements required for each of the instrument types within the common schema will be determined by the business rules for that instrument type. The concept of common elements used across different instrument types is shown in the table below.

The six registry instrument types and one information report that are proposed for the initial implementation of NECS in NSW are:

1 Discharge of Mortgage

2 Transfer

3 Mortgage

4 Caveat

5 Withdrawal of Caveat

6 Change of Name

7 Notice of Sale.

Three additional instruments, Transmission Application, Notice of Death and a Consent instrument (electronic equivalent of a Production Receipt for a third party holding Control of the Right to Deal to provide their consent to a transaction) will be implemented as soon as feasible for NECS to accommodate these instruments.

45 Compliance assurance will include publication of compliance assurance business rules as well as providing a Lodgment Verification service for electronic Lodgment Cases.






been superseded

Using a common schema means that maintenance of data requirements and instrument templates should be much easier and avoid the need to have 83 or more different schemas to accommodate the full range of NSW Land Registry instruments for electronic conveyancing into the future.

The common schema approach should significantly benefit industry participants who need to develop, maintain and use electronic registry instrument templates for their in-house systems.

For example, every registry instrument involves a Party Relinquishing46 and a Party Receiving47

Party Relinquishing would be the Mortgagee in a Discharge of Mortgage Instrument, the Mortgagor (Borrower) in a Mortgage Instrument, the Transferor (Vendor; Seller) in a Transfer Instrument, and the Caveator in a Withdrawal of Caveat Instrument.

.

Party Receiving would be the Mortgagor in a Discharge of Mortgage Instrument, the Mortgagee (Lender) in a Mortgage Instrument, the Transferee (Purchaser; Buyer) in a Transfer Instrument, and the Caveator in a Caveat Instrument. Note that there is a deemed Party Receiving in some registry instruments such as a Discharge of Mortgage which is not required to be executed by the Mortgagor.

The use of Party Relinquishing and Party Receiving provides a common set of terms that can be used in relation to the all registry instrument types to clearly indicate if the interest is being added or removed from the Register. This avoids the need to use instrument specific terms such as transferor/transferee, mortgagor/mortgagee.

Common use of data elements across different instrument types

Common Registry Instrument Schema Instrument Type Using the Element

Element Discharge of Mortgage

(D)

Transfer (T)

Mortgage (M)

Transm'n Application

(TA)

Notice of Death (ND)

Change of Name (CN)

Withdrawal of Caveat

(WX)

Caveat (X)

Registry Instrument Type Yes Yes Yes Yes Yes Yes Yes Yes

Duty Yes Yes Yes Yes

Land Title Reference Yes Yes Yes Yes Yes Yes Yes Yes

Party Relinquishing Yes Yes Yes Yes Yes Yes Yes Yes

Tenancy and Share Held by Party R li i hi

Yes Yes Yes Yes Yes

Estate/Interest Affected Yes Yes Yes Yes Yes Yes Yes Yes

Transaction Value Details Yes

Date of Event Yes Yes Yes Yes Yes Yes Yes Yes

Supporting Evidence Yes Yes Yes

Memorandum Yes

Additional Covenants and Conditions Yes Yes Yes

Encumbrance Yes Yes

Claim of Caveat Yes

Action Prohibited Yes

Information Report Reference Yes Yes Yes Yes

Party Receiving Yes Yes Yes Yes Yes Yes

Tenancy and Share Received Yes Yes Yes

Registry Instrument Counterpart S b ib

Yes Yes Yes Yes Yes Yes Yes Yes

Registry Instrument Counterpart C tifi

Yes Yes Yes Yes Yes Yes Yes Yes

46 A Party that disposes of or alters an Estate or Interest in Land, or removes or alters a Constraint or administrative action 47 A party that is gaining an Estate or Interest in Land, or benefits from a Constraint or administrative action






been superseded

Development of the common NSW registry instrument schema is progressing for producing a new generation of forms suitable for automated electronic production of completed registry instruments. The schema is intended to provide forms suitable for both paper-based and electronic conveyancing. The only major difference should be the execution/signing section of the instruments and the way in which supporting evidence required is recorded. An initial draft of the new registry instrument schema is planned to be available for review on the LPMA website later in March 2010.

The XML schema in the new forms will define the form fields using the NECDS, so that it will be consistent with the future standard for electronic conveyancing, as well as providing a means for automated production of instruments for paper-based conveyancing.

The industry practitioners and financial institutions requirement for automated production of completed registry instruments was identified in the 2006 NSW forms analysis conducted by the NSW NECS Readiness Program. Industry firms currently develop their own instrument templates for automated production of registry instruments. This is because the current NSW registry forms48

The new generation of NSW registry instrument templates will be XML compliant. LPMA seeks feedback from conveyancing industry participants on requirements for the format of these templates. It is known that large institutions use proprietary products for their templates used in instrument production. Other industry firms create their templates in MS Word or Adobe Acrobat.

are not suited to automated preparation of completed instruments from in-house case management systems.

Currently, many NSW instrument form licensees customise their registry instrument forms (within approved limits) for their own requirements. In future, implementation of electronic conveyancing will require all forms to be standardised. Any user specific information will need to be captured as variable data within the standard form. The NSW Land Registry notes that other jurisdictions have been able to achieve standardised registry instrument forms such as used for a mortgage or discharge of mortgage.

The NSW Land Registry seeks industry practitioners’ and financial institutions’ feedback on any specific requirements that will be necessary to achieve standardisation of registry instrument templates. For example:

• Will it be possible to incorporate all transaction specific terms and conditions for a Mortgage within a limited set of Memoranda for a mortgagee?

• All Discharges of Mortgage and Mortgages will have to use a standard set of operative words. Will it be necessary to include an additional text data field associated with the standard operative words to record mortgagee-specific Covenants and Conditions, or can these all be incorporated in the Memoranda. The additional text field49

would have to be limited to a capacity, say, of a 500 characters maximum?

48 Existing forms are in PDF format produced with Adobe Acrobat version 4.

49 This additional textual data would not undergo any validation by the Land Registry






been superseded

Issue 4 – Requirements for registry instrument templates

4.1 Do conveyancing industry participants support the NSW Land Registry approach of using a common schema to ensure consistency across all instrument types and simplify the extensibility of electronic conveyancing to all instrument types?

4.2 Can industry practitioners and financial institutions use a common standardised registry instrument template for each registry instrument type? This means eliminating forms customised for a specific industry practitioner or financial institution. Are there any special requirements necessary to achieve this goal?

4.3 Operative Words on each instrument type will be standardised for all users for paper and electronic environments. Can industry practitioners and financial institutions work with this constraint, or will it be necessary to incorporate a limited size (say 500 characters) variable data field for terms and conditions to be associated with the Operative Words?

4.4 How much time will financial institutions require to transition to standardised Operative Words on NSW registry instruments?

4.5 In what formats should the NSW Land Registry produce its new registry instrument templates e.g. XHTML or XML compliant MSWord or Adobe Acrobat?

4.6 Will industry practitioners and financial institutions use the NSW LR’s new XML forms in their in-house systems, or will they use the LR schema to build their own templates?






been superseded

7.2. Registry Information

Registry Information is a set of information about a Land Title that is supplied by a Land Registry in an electronic format for use in Conveyancing. Registry Information is generically described in the NECS Roadmap50

While Registry Information is a product for use in NECS Workspaces, it can be just as suitable for electronic preparation of registry instruments for use in paper-based conveyancing.

documents as a required Land Registry service for NECS workspaces.

1. Content of Registry Information

The features proposed for Registry Information are that it contains:

• Land Title information (both as discrete XML data items and as a conventional Title Search)

• property details such as street address as recorded in the Land Registry

• the name of the party issued with the CT or holding Control of the Right-to-Deal (if Optional No-CT is introduced)

• all information provided in XML as discrete data

• data items defined using the NECDS adopted for national electronic conveyancing, and

• for data security purposes, is available only to a registered customer of an Information Broker or LPMA.

There are options for the final specification of Registry Information, and the NSW Land Registry seeks conveyancing industry participants’ feedback on its requirements for this product. A summary list of Registry Information content requirement options is included as Appendix D. An example of a conventional NSW Title Search is included for reference at Appendix A.

There are currently six different Land Title types51 used in NSW. These have evolved over many decades, so there are some legacy data issues52

However, there is the opportunity that additional Land Registry Information can be added to Registry Information to provide a comprehensive package of information about a Land Title to improve the value of the information set and opportunity for due diligence and compliance assurance checks necessary to be undertaken in the conveyancing process.

that may make it difficult to provide all the information currently contained in existing Title Searches as discrete XML data using NECDS.

2. Control of the Right-to-Deal (CoRD) Details

Presentation of the Duplicate Certificate of Title (CT) as supporting evidence is required for registration of most53

LPMA has commissioned expert advice regarding the future of the Certificate of Title. Input to this consultancy will come from other jurisdictions as well as NSW and the results will be made available to government and industry stakeholders. Recommendations from this study are expected around mid 2010.

real property transactions at the NSW Land Registry. Currently obtaining information about where the latest edition of a CT was delivered is a separate (free) CT Inquiry search at the Land Registry. This information could be included in Registry Information.

50 The NECS Roadmap documents can be found at http://www.necs.gov.au/NECS-Roadmap-Documents/default.aspx 51 The six title types are Fee Simple Title, Auto Consol Title, Strata Leasehold Title, Perpetual Leasehold Title, Lease Folio Title, and Sub-folio Title.

52 An example of this legacy problem is that Land Title interests may be recorded on the Register in text that is not adequately coded to facilitate transformation into a specified data item within NECDS. 53 For example, the CT is not required for recording or withdrawing a Caveat






been superseded

http://www.necs.gov.au/NECS-Roadmap-Documents/default.aspx�

In the future environment, the concepts relating to Control of the Right-to-Deal (CoRD) may change. For example, if Optional No-CT54

3. Property Details

is introduced in NSW and the name of the transacting party holding CoRD is recorded in the Register if No CT is issued, Registry Information could indicate the means by which CoRD is defined i.e. delivery details for a CT that has been issued or No-CT has been issued and the party name holding CoRD is recorded on the Register.

All changes on the Land Title involving a change to ownership information (including Change of Name) require preparation and inclusion of a Notice of Sale (NOS) in the Lodgment Case. The property address is required for completion of the NOS. The Land Registry could include the property street address recorded for the Land Title as an element of the Registry Information so that it can be populated in the electronic NOS Information Report when created in a NECS Workspace. This would provide functionality similar to the new eNOS document creation facility offered by LPMA where the property address is automatically populated when the Land Title Reference is populated. Otherwise, obtaining the property address currently requires a separate (no-fee) Reverse Street Address search.

There is also the option of the Land Registry including the Land Valuation property Identifier in the Registry Information, so that the user can see that multiple titles have a common identifier and therefore are considered part of one property.

4. Authentication and Re-use of Registry Information

Land Registry analysis of the conveyancing process indicates that conveyancing industry participants currently purchase a Title Search for each transaction and then carry this forward as reference information throughout the conveyancing process. The Title Search is only refreshed if there is reason to believe there has been a change on title or as part of a due diligence check immediately prior to settlement to make sure that the requirements for completing the transaction are still valid.

The NSW Land Registry seeks conveyancing industry participants’ feedback on whether the NSW Land Registry should provide a Registry Information product that facilitates this practice of carrying forward Land Title information in electronic conveyancing in just the same manner as with paper-based conveyancing.

Mandating the use of Registry Information in preparing an electronic transaction (a recommendation made by the NPT55

The NSW Land Registry considers that it is feasible for Registry Information to be digitally signed to facilitate electronic authentication and re-use of Registry Information. In the same way that registry instruments prepared using NECS will be able to be digitally signed so that they can be authenticated for registration; the Land Registry could digitally sign Registry Information including the identity reference for the purchaser

) is a sensible risk management requirement for conveyancing. However, requiring the purchase new Registry Information through NECS (when the product may have already been purchased as part of conveyancing due diligence practices prior to creating a NECS Workspace for the transaction) may add an additional cost burden on to electronic conveyancing.

56

54 Optional No-CT is where the Controlling Party elects not to receive a hard-copy CT. Instead, identifying details of the Controlling Party are recorded on the Register. The Controlling Party is then formally required to provide their consent for the next transaction to be registered.

and the date/time stamp for its issue. The Land Registry’s digital signature would provide the means for authenticating the data as having been obtained from the Land Registry, as not having changed since being supplied by the Land Registry, and the identity reference of the purchaser of the Registry Information.

55 Recommendation made at the NPT meeting on 25 August 2009 – see section 5 of this consultation paper. 56 For example, the purchasing customer identity reference could be the Subscriber ID, or the customer number with the Information Broker providing the Registry Information service.






been superseded

With this authentication, a purchaser of Registry Information who is a NECS Subscriber would be able to accountably bring the Registry Information already purchased into the NECS Workspace57

5. Bundling

to prepare and complete the transaction using electronic conveyancing.

58

Legacy data issues may mean that not all Land Title information will initially be presented as discrete XML data in XML using NECDS. For this reason, NSW supports the NPT request that Registry Information should include a conventional Title Search. This will ensure that Registry Information will include, from first release of the product, all the information currently contained in an existing format of Title Search. For example bundling options for LR Transaction Services could include:

of conventional Title Search with Registry Information

Possible product bundle options

Product Bundling options Standard Title Search



Subscription a) Standard Title Search + Registry Information

b) Standard Title Search + Title Activity Check Subscription

c) Registry Information + Title Activity Check Subscription

d) Standard Title Search + Registry Information + TAC Subscription

Feedback is requested from industry on their likely requirement for product bundling options.

57 Registry Information brought into a NECS Workspace will need to be accompanied by a linked Title Activity Check – see the next section in this consultation paper 58 Bundling means that several information products are sold in one package.






been superseded

Issue 5 – Requirements for Registry Information

5.1 What data content is required in a Registry Information product? – Is the information set indicated as “Essential” in the Requirements column in Appendix D sufficient? Industry participants are invited to provide justification of any varied or additional data requirements specification for inclusion in Registry Information.

5.2 When is it envisaged industry participants will need/use Registry Information: 5.2.1 in the business environment for - electronic conveyancing only, or - both electronic and paper based conveyancing? 5.2.2 at what point in the workflow will it be used - prior to creating or using a NECS Workspace or - only in a NECS Workspace - in the industry participant’s system for both electronic and paper-based transactions?

5.3 Should the Land Registry digitally sign the Registry Information for authentication purposes?

5.4 Should a NECS Subscriber be enabled to take Registry Information into a NECS Workspace?

5.5 Should a conventional search be bundled with Registry Information?

5.6 Should a Title Activity Check Subscription be bundled with Registry Information?

5.7 Should the information search customer self-determine product bundling (i.e. a Conventional Title Search, Registry Information, and Title Activity Check subscription individually or together) at time of ordering?

7.3. Title Activity Check Subscription

A Title Activity Check is to be a check undertaken by a Land Registry to determine whether a Lodgment or Registration has occurred as regards a Land Title in a defined time period.

The proposed functionality for a Title Activity Check (TAC) is that the service can be purchased for a set period for a specified Land Title. The entity purchasing the service would have an identifier that can be used to call the Land Registry to obtain a Title Activity Report that will advise if there has been a change on the Land Title since the start of the service subscription period for the specified title.

The diagram below shows a comparison between:

• the existing process whereby the practitioner currently needs to order a new Title Search to determine if there has been a change on the nominated Land Title, and

• the TAC process whereby the practitioner system polls the Land Registry to determine if there has been a change on the Land Title.

The TAC means that the user can check if there has been a change on title at any time within the subscription period for the TAC, and can decide whether to purchase new Registry Information when a change is identified on the Title.






been superseded





Research conducted by the NSW Land Registry has indicated that there is a 6% chance of a change on a Land Title in each of the two months before settlement for a settlement transaction.

Comparison of Title Searching versus Title Activity Check

Pape

rEl

ectr

onic

Title Search

Title Search

Title Search

Title Search

Request Title Search




Contract Prep

Instruction ExchangeDocument

PrepSettlement

Request Registry Information and TAC

Poll Land Registry

Poll Land Registry

Request new Registry Information

XML XML

Poll Land Registry

No changeNo change Change

identified

1. Period of Title Activity Check Subscription

What should be the subscription period for a TAC? From a Land Registry point of view, the price of the TAC will be a function of the length of the subscription period associated with the TAC. Which of the following options are preferred by conveyancing industry participants:

a) a single pre-determined period such as 859

b) multiples of a pre-determined period such as 8, 16, 24, 32 weeks weeks (or a defined number of calendar days)

c) a variable period defined by the customer when purchasing the TAC?

The NSW Land Registry considers that an 8 week TAC Subscription may be suitable for a mortgage provider, while a 16 week TAC Subscription (or longer) may be more suitable for a practitioner acting in a Transfer.

2. Content of the Title Activity Check Response

What should be the information content of the TAC response? How much information should the Land Registry provide? The Land Registry sees the following feasible options for information to be provided by the TAC during the Subscription period:

a) A Boolean Yes/No to whether there has been a change on the title, or b) A Boolean Yes/No and the date/time of the change (or the date/time for each change where there

are multiple changes) c) A Boolean Yes/No, the date/time of each change and the dealing/plan number60

59 8 weeks was proposed by industry at the NPT meeting on 8 December 2009.

for each change on the Land Title.

60 This should include both registered and unregistered dealing numbers.






been superseded

The NSW Land Registry considers that concept (c) probably has most value for conveyancing industry participants, but seeks feedback from industry on their requirements.

3. Number of TAC calls to the Land Registry

The volume of calls to the Land Registry for each TAC Subscription product sold will need to be limited to ensure that the Land Registry TAC service does not become overloaded. It is proposed that there be a limit applied to the number of TAC calls that can be made for each TAC product that is sold. Each TAC Subscription product purchased will refer to one Land Title Reference.

The NPT recommendation for TAC Implementation was for NECS to provide , by polling the Land Registry, three TACs during the lifetime of a workspace, one a week before settlement, one a day before settlement and one an hour before settlement (a NECS automated 3 calls in total). These automated TACs are to be able to be supplemented at any time by Subscriber-requested TACs. The NSW Land Registry proposes that 100 calls in an 8 week subscription period for a TAC would be an appropriate limit.

4. Bundling of TAC with Registry Information

A TAC Subscription does not completely address the due diligence risks for a transacting party unless it is paired with Registry Information that defines the state of the Land Title at the start of the subscription period for the TAC.

The NECS Roadmap documents require that both (1) Registry Information and (2) A TAC are available for compliance assurance checks for the transaction being prepared in a NECS Workspace.

The NSW Land Registry supports the risk management approach that recommends a TAC be used in conjunction with a TAC. This suggests that the TAC should be available bundled with Registry Information.

There are a number of implementation issues that need to be considered where the Land Registry seeks feedback on industry requirements and preferences.

If a TAC is sold bundled with Registry Information, this will clearly indicate the state of the Land Title at the commencement point for the TAC Subscription. What should happen to the original TAC Subscription when the TAC Report indicates a change on the Land Title and new Registry Information is purchased by the participating Subscribers for the NECS Workspace? (The new Registry Information is required in the Workspace as reference information to update, if necessary, the registry Instruments in the Lodgment Case for registration compliance.)

Should the purchaser of the TAC Subscription have the option of:

a) the existing subscription continuing, or b) purchasing a new subscription period, or c) both?

5. Mode of delivery of Title Activity Report:

The TAC could in theory be either a proactive61 or a reactive62

61 Proactive service meaning that the Land Registry monitors Land Titles and sends a Title Activity Report to subscribers when there is a change on the title in the purchased subscription period.

service. While industry practitioners and financial institutions have indicated they prefer a proactive service (subject to many liability disclaimers),

62 Reactive service meaning that the Land Registry is polled to determine if there has been a change on the title in the period for which a subscription has been purchased.






been superseded

the Land Registry assessment of risk indicates that the reactive service is the most reliable strategy. This is because the Subscribers participating in a NECS Workspace can be sure that the requirement for a TAC has been satisfied for the Workspace if a call has been made and a Title Activity Report has been received. The Proactive Alert service puts an unacceptable risk on the Land Registry to ensure that the Workspace receives the Alert. The Reactive TAC puts the risk onto NECS and the Subscriber to ensure that a TAC has been called and the response to the TAC has been received and acted on. The justification for this position is set out in the table below.

Risk assessment for mode of providing Title Activity Check

Mode of service provision

Land Registry risks to be addressed Risk assessment

Rationale for Risk Assessment

Proactive Alert service

Risk of giving incorrect Activity information for a Land Title

Medium Same as Reactive service

Risk of making sure that Subscriber for the service has received the Alert information

High Land Registry carries the risk for making sure NECS receives the Alert

Reactive Title Activity Check service

Risk of giving incorrect Activity information for a Land Title

Medium Same as Proactive service

Risk that a response is not provided for a TAC Request

Low NECS carries the risk and can repeat the TAC request if no response is received

While conveyancing industry participants’ feedback indicates there is a market requirement for a Proactive Alert service, the NSW Land Registry considers for the reasons shown in the table, that the Reactive TAC is the best risk management assurance strategy for the Land Registry in respect of provision of title activity check services.

There are a number of options in the specification of the TAC service on which the NSW Land Registry seeks conveyancing industry participants’ comment.






been superseded

Issue 6 – Requirements for Title Activity Check

6.1 For what reasons would the NSW Land Registry proposal for a reactive Title Activity Check not be suitable?

6.2 What information should be contained in the Title Activity Report received in response to a request for a Title Activity Check?

6.3 What is the appropriate subscription period and limit on number of calls to the Land Registry for a TAC product?

6.4 Should the start time/date for the TAC be: (a) auto specified by the date/time of the purchase/issue of the TAC product, or (b) specified by the purchaser in the purchase request for the TAC

6.5 Should the TAC be bundled with Registry Information?

6.6 Should the purchaser of the TAC Subscription: (a) have the option of the existing subscription continuing, or (b) purchasing a new subscription period, or (c) both?

6.6 Is the proposed product structure reasonable? If not, why not?

7.4. Compliance assurance

Compliance assurance of transactions for lodgment and registration is an essential requirement for conveyancing industry participants and the Land Registry to achieve Straight-Through-Processing and rapid registration of transactions.

Currently compliance verification of instruments is undertaken by industry practitioners during preparation of transaction documentation. Further compliance assurance is undertaken by participants or agents at settlement and prior to presentation at the Land Registry. The current industry activities result in a requisition rate by the Land Registry in excess of 5% of cases63

The discussion of compliance assurance in section 6.3 above indicated that compliance checks occur throughout the conveyancing process. These compliance checking activities minimise re-work if the compliance assurance can be done at the original point of data collection in the conveyancing process.

lodged. This 5% requisition rate significantly increases the industry and Land Registry resource requirement for processing and registering instruments.

One of the features of electronic conveyancing will be ensuring data is consistent within the transaction in the NECS Workspace. For example, the information for each transacting party must be the same for all instruments in which that party appears. For industry firms using web services interactions with NECS, this means that non-compliance may be detected when instrument data is transmitted to the NECS Workspace by the Subscriber, because differing information may have already been entered by another participating Subscriber. For example the name of a transacting party may have been incorrectly captured by one of the participating Subscribers.

63 There is an average of 2 registry instruments to a lodgment case, and non-compliance of one instrument means that registration of the whole case is delayed until the requisition of the non-complying instrument is satisfied.






been superseded

To provide a mechanism for resolution of accountability and accuracy of data in a transaction, NECO has proposed in a NPT issue paper on Data Supply64

The outcome is that each NECS workspace data item is to be assigned an Authoritative Supplier. The Authoritative Supplier of each data item contained in a document template as well as others necessary for the operation of NECS is to be assigned by NECS in consultation with key stakeholders especially the stakeholders relying on the integrity of specific data items in Registry Instruments and Information Reports.

and the NPT has endorsed the principle of an Authoritative Supplier for each data item in a NECS Workspace. The NPT meeting on 8 December 2009 discussed the issue of assigning an authoritative supplier to each workspace data item and the reason why it was necessary in the electronic environment of NECS. In the paper system, protocols and understandings have been developed over many years as to what information for the transaction is authoritatively provided by which participant. The industry representatives at the NPT meeting determined to support Authoritative Supplier protocols for the NECS workspace in awareness of the potential for the same data item being uploaded by several participants and the need to incorporate business rules in NECS to resolve potential update contentions.

The manner in which electronic registry instruments are signed and authenticated means that correction of a signed electronic registry instrument in NECS would involve:

• Prior to lodgment – invalidating the signed instrument, correcting the data item and re-signing a new instrument or instruments if more than one is affected by the data change

• After lodgment - creation and digital signing of a replacement registry instrument and its lodgment with the Land Registry to replace the requisitioned instrument.

However, the existing Roadmap functional definition for NECS does not make any provision for handling requisitions in NECS, or the production of replacement electronic registry instruments for those already lodged. It is therefore essential that effective compliance assurance be implemented to minimise the incidence of requisitions following settlement and lodgment in electronic conveyancing.

Analysis of requisitions has indicated that, in theory, the cause of most requisitions65

Land Registry compliance rules will advise of non-compliance. It will be the responsibility of the advice recipients with access to the relevant supporting information to make the necessary corrections to instruments to ensure the accuracy, integrity and compliance of information for lodgment and registration.

requiring amendment of a signed instrument should be identifiable by automated compliance checks during the transaction preparation and documentation process prior to settlement and lodgment.

The NSW Land Registry services to be provided for compliance assurance are:

3. Publication of business rules for compliance assurance (to facilitate conveyancing industry participants and NECS implementation of the business rules66

4. A Lodgment Verification service containing:

in their systems)

4.1. calculation or confirmation of lodgment fees payable for instruments in the Lodgment Case

4.2. Title Activity Report

4.3. Lodgment Acceptability Advice67

64 The NPT issue paper on Data Supply can be found at

http://www.necs.gov.au/Issue-Papers/default.aspx .

65 This excludes requisitions for evidence necessary to address risk issues that do not involve any change to data in the signed instrument. 66 This will be the business rules that are suitable for publication. There may be some business rules (such as verifying a Title Reference or Certificate Authentication Code) that can only be implemented as a service at the Land Registry. 67 Required for NECS at a set period prior to settlement






been superseded

http://www.necs.gov.au/Issue-Papers/default.aspx�

4.4. a Registration Compliance68

Compliance assurance feedback information is proposed to be a listing of non-compliance with Land Registry business rules.

Report for all documents in a Lodgment Case

The Lodgment Verification service will include triggering of:

• calculation or confirmation of the lodgment fees69

• the Title Activity Check where this service has been purchased for the affected Land Title. payable for instruments in the Lodgment Case

Appendix E contains a table illustrating the scope of information that may be received in response to a Lodgment Verification.

The components of the Lodgment Verification response are expected to include:

• Lodgment Verification ID: identifiers for the specific Lodgment Verification Request and the Lodgment Verification report.

• TAC Report: A Boolean response indicating if there has been any Lodgment or Registration on the Land Title specified for the TAC, and a listing of those changes since the issue timestamp for the TAC up to the time of the Lodgment Verification, within the TAC Subscription period.

• Lodgment Acceptability Advice: A Boolean indication of whether the Lodgment Case will be accepted for lodgment

• Lodgment Fee Calculation: The Lodgment Fees required to be paid for the Lodgment Case

• Registration Compliance Report: A compliance statement based on an automated check of requirements for registration, subject to further checks undertaken by the Land Registry prior to registration.

As a transition strategy, the NSW Land Registry has the option of making a registry instrument compliance assurance service available to industry practitioners and financial institutions concurrently with implementation of electronic conveyancing in NSW. This would be dependent on the acceptance of NECDS by industry and its use in an instrument schema that is consistent between paper and electronic transactions.

The NSW Land Registry is considering whether an automated registry instrument or Lodgment Case compliance assurance service for XML forms used for preparing paper-based registry instruments is a feasible service to the conveyancing industry concurrently with implementation of NECS. The instrument compliance assurance service70

Use of the compliance assurance service for paper-based instruments would require conveyancing industry participants to use the new registry instrument template that uses NECDS and NSW instrument schema (as described in section 7.1 above), and electronically submit the completed instrument to the NSW Land Registry for Lodgment Verification prior to printing and signing as a paper instrument.

would provide the opportunity for both conveyancing industry participants and the Land Registry to cooperatively develop and test the compliance assurance service that will be necessary for electronic conveyancing and also provide benefits for paper-based transactions concurrently with the transition to electronic conveyancing.

68 The Registration Compliance Report will only be able to check those aspects of documents in a Lodgment Case suitable for automated compliance assurance and, depending on the content of the Register and characteristics of the Lodgment Case may not cover all Land Registry compliance requirements for registration. 69 Advice of the requirement for payment of lodgment fees will be a component of the Registration Compliance Report. 70 A Lodgment Case compliance service would require the Lodging Party to collect electronic XML versions of all the instruments in transaction and electronically submit them as a Lodgment Case to the Land Registry for Case Verification.






been superseded




Issue 7 – Requirements for compliance assurance

7.1 Are the Land Registry compliance assurance services listed in 1.2 and 2.1 to 2.4 above sufficient and useful for (a) electronic conveyancing, (b) paper-based conveyancing? If not, how could the proposed services be improved?

7.2 Do conveyancing industry participants support a transition approach to development and implementation of a Land Registry compliance assurance service? If not, what strategy of implementation should be used by the NSW Land Registry?

7.3 Would industry practitioners and financial institutions use a Lodgment Verification transaction service for paper-based registry instruments?

7.4 What content and format of compliance feedback is required by industry practitioners and financial institutions for advice of compliance assurance of a transaction?

7.5. Delivery of documents

Registration of paper-based transactions in NSW currently results in original mortgages being returned to the mortgagee as an original record of the wet signature of the mortgagor.

With the acceptance of Land Registry images of original instruments as valid copies of the originals, the NSW Land Registry asks industry practitioners and financial institutions if there is still a need to return the original mortgage instrument to the mortgagee after registration. The practice of returning the original mortgage has already ceased in most other jurisdictions.

The NSW Land Registry questions the future need for the practice of returning the original mortgage instruments. Can this practice be discontinued (with the original registry instrument destroyed in the same manner as other instrument types)?

Imaged copies of registered mortgage instruments can be obtained via electronic searches if required.

NSW has surveyed practices in other jurisdictions and this survey highlights NSW as being the only jurisdiction which still returns the original mortgage instrument (to the Lodging Party). Three other jurisdictions (TAS, SA, and NT) allow a mortgage to be lodged in duplicate as an option, although this option seems to be increasingly less utilised. However, where the mortgage has been lodged in duplicate in those jurisdictions, the duplicate is always returned.

There is also the potential that, if Optional No-CT (or another form of CT or CoRD that does not involve a hardcopy CT) is adopted with electronic conveyancing, this will further reduce the volume of deliverable documents from the Land Registry.

Issue 8 – Requirements for delivery of documents

8.1 Does the NSW Land Registry need to return original registered mortgage documentation to the mortgagee?






been superseded

8. Glossary of Terms

TERM DEFINITION

Authorised Officer A Natural Person entrusted as an employee of an Organisation with the responsibility of acting for and on behalf of that Organisation

Authoritative Supplier The Subscriber participating in a (NECS) Workspace who is regarded as the source of truth for a Workspace Data Item

Business Rule A statement that defines or constrains an aspect of the business, such as attribute and relational requirements that apply to a Workspace Data Item

Business Rule Approach A method of managing business rules promoted by the Business Rules Community, that is based on externalising business rules from processes and establishing the rules as a separate resource

Certificate of Title (CT) See Duplicate Certificate of Title

Certifier A User who is employed or contracted to a Subscriber and authorised to certify and sign registry instruments, settlement statements and information reports on behalf of the Subscriber for the Client represented by the Subscriber

Compliance Assurance The determining of the validity of one or more Workspace Data Items by the application of appropriate business rules.

Controlling Party A Party that is recognised as having Control of the Right to Deal

Control of the Right-to-Deal (CoRD)

An authority that qualifies the inherent right a Proprietor of an Estate has to deal with their Estate

Due Diligence A process of collection of material facts relating to a Land Title and proposed changes to that title

Duplicate Certificate of Title (CT)

A certified rendering of information contained in a Land Title, issued and delivered by a Land Registry and used to indicate, by possession thereof, the Control of the Right to Deal

Duty Assessment A process to determine the prescribed amount of Duty payable on a specific document

Duty Verification A process that verifies the compliance of a Duty Assessment

Industry Practitioner A Legal Practitioner or Licensed Conveyancer

Information Broker An authorised agent for the supply of information from the authoritative sources of that information including from a Land Registry

Information Report A document that contains transaction information required by government taxing, valuing and rating authorities about a transaction. The content of a report is determined by the receiving authority






been superseded

http://necsvocab.pbworks.com/Party�

http://necsvocab.pbworks.com/Control-of-the-Right-to-Deal�

TERM DEFINITION

Land Registry (LR) A Government Body that is responsible for administering a Torrens Title Register for a Jurisdiction

Land Registry (LR) Transaction Services

The products and services required from a Land Registry for due diligence, preparation and compliance assurance for a real property transaction to be registered at that Land Registry

Land Title An authoritative record held in a Torrens Title Register and records a description of a specific quantum of land, any stratum above or below that land, details of each Estate, each Registered Proprietor of an Estate, and any Interest in Land or other matters affecting that land

Lending Industry XML Initiative (LIXI)

An Incorporated Organisation formed to negotiate and be custodian for data standards used between systems in the lending industry

Lodgment A process undertaken by an Organisation that involves the allocating of an Identifier, and/or application of some other recording action, to information presented for recording in a public register, such as a Land Registry allocating a Dealing Number or applying some other recording action to each Registry Instrument in a Lodgment Case that has undergone Presentation for registration in a Torrens Title Register

Lodgment Acceptability Advice

A compliance report that documents a result derived from a Lodgment Verification

Lodgment Acceptability Assurance

A Lodgment Acceptability Advice that indicates that a Lodgment Case is acceptable for lodgment

Lodgment Verification A process that verifies if a Lodgment Case in a Workspace can undergo Lodgment at that point in time

Lodgment Case A set of information that is presented to a Land Registry for Lodgment containing at least one Registry Instrument that is intended to be Registered on the Torrens Title Register at the same time, and any Information Report or other information required by that Land Registry

LPMA The Land and Property Management Authority –NSW is the Government agency within which Land Registry activities are undertaken for NSW

National Business Model (NBM)

Describes the overall business context for NECS, the roles and responsibilities of the affected industry participants, and the commercial arrangements and risk management regime necessary to make it viable. It is the foundation upon which all of the subsequent NECS Roadmap documents are based. This document is published at www.necs.gov.au

National Electronic Conveyancing Office

An administrative office charged with co-ordinating collaborative determination of the requirements for NECS among Industry and Government stakeholders prior to this role being assumed by National E-Conveyancing Development Limited






been superseded

http://necsvocab.pbworks.com/Torrens-Title-Register�

http://necsvocab.pbworks.com/Registered-Proprietor-Of-An-Estate�

http://necsvocab.pbworks.com/Interest-In-Land�

http://www.necs.gov.au/�

TERM DEFINITION

National Electronic Conveyancing System (NECS)

The central facility providing Subscribers with the means for creating transaction workspaces, for preparing registry instruments, information reports and settlement statements, for assembling the instructions and other requirements for electronic settlement of the financial aspects of transactions, and for transmitting registry instruments to a Land Registry and information reports to a revenue office and/or valuing and rating authorities

National Electronic Conveyancing Data Standard

The Data Standard used for communication between NECS and other systems

NECS Readiness Program A body of work undertaken in LPMA to achieve the primary business and community outcomes required for the implementation of an electronic conveyancing system in NSW

Notice of Sale (NOS) An Information Report that specifies information required about a Transaction by a Government Body, such as taxing, valuing and rating authorities,

Operative Words The text in a formal legal document, such as a Registry Instrument, that has legal operation to affect rights and liabilities of Parties covered by the document

Optional No-CT A Land Registry practice that allows a Controlling Party meeting defined criteria to have the choice between issue of a Duplicate Certificate of Title or its non-issue and a suitable recording by the Land Registry that identifies the Party holding Control of the Right to Deal

Office of State Revenue (OSR)

The Revenue Office for the State of New South Wales

Party Receiving A party that is gaining an Estate or Interest in Land, or benefits from a Constraint or administrative action, and being one of, for example:

Mortgagor in a Discharge of Mortgage Instrument Mortgagee (Lender) in a Mortgage Instrument Transferee (Purchaser; Buyer) in a Transfer Instrument Caveator in a Caveat Instrument

Party Relinquishing A Party that disposes of, or alters an Estate or Interest in Land, or removes or alters a Constraint or administrative action, and being one of, for example:

Mortgagee in a Discharge of Mortgage Instrument Mortgagor (Borrower) in a Mortgage Instrument Transferor (Vendor; Seller) in a Transfer Instrument Caveator in a Withdrawal of Caveat Instrument

Presentation A process that delivers information to an Organisation for a prescribed activity, such as delivery of a Lodgment Case to a Land Registry for Lodgment






been superseded

TERM DEFINITION

Registrar General’s Directions

A LPMA publication containing the NSW Land Registry legal and practice requirements for a transaction to be in order for registration

Registration Compliance Report

A compliance report that documents a result derived from applying available business rules related to the registration requirements of a Land Registry to a Registry Instrument or Lodgment Case

Registry Information A set of information about a Land Title that is supplied by a Land Registry in an electronic format for use in Conveyancing

Registry Instrument (RI) A legal instrument in a form prescribed by the Land Registry as necessary to effect any change to the Land Registry’s Torrens Title Register.

Responsible Subscriber A Subscriber that is responsible for a Lodgment Case, undertakes Presentation of that a Lodgment Case through an Electronic Lodgment Channel such as NECS, is liable for fees incurred, and is responsible for resolution of requisitions issued by a Land Registry

Requisition A notice that is sent to the appropriate Party and documents any violations of business rules.

Revenue Office A Government Body that is based in a Jurisdiction as collector of Duty and taxes payable on certain Transactions and responsible for effective systems of compliance with legislated Duty and tax obligations

Settlement A process that enables all contractual obligations to be completed by each Transacting Party, any associated moneys to be paid, and the passing of an equitable entitlement or other right in property to each Party Receiving

Settlement Certification A certification that specifies one or more conditions related to a Settlement that must be complied with and is intended to be certified as true in the circumstances, such as by a Financial Institution holding an ESA of cleared funds being available for a Settlement.

Settlement Statement A statement of the particulars of a financial settlement.

Straight-Through-Processing

Automated processing of data from beginning to end of a business process without manual intervention

Structured Business Vocabulary

The set of terms and their definitions, and basic relationships between those terms that organises operational business knowledge

Subscribers Corporations, partnerships, government agencies and natural persons meeting the minimum requirements for using NECS to prepare, certify and sign registry instruments and to execute financial settlements, and where agreed to by all the Subscribers in a Workspace, act as the Subscriber responsible for electronic lodgment of a lodgment case

Template A re-usable structured collection of fixed text and placeholders for data items from which one or more documents of the same type and format can be generated






been superseded

TERM DEFINITION

Time Stamp A record of the date and time of an action and the identity of the person or device that created the record.

Title Activity Check A Title Activity Check is an electronic query against a Land Title with a Land Registry to determine whether a Lodgment or Registration has occurred as regards the Land Title in a defined time period

Title Activity Check Subscription

An agreement to take and pay for a specified number of Title Activity Checks, possibly within a specified time period

Title Activity Report The information supplied by a Land Registry as the result of a Title Activity Check

Title Search Information that is supplied by a Land Registry in a human-readable format for use in Conveyancing, being information extracted from a Land Title

Torrens Title Register A public register that is maintained by a Land Registry under the relevant legislation and contains information related to Real Property

Transaction Assurance The processes and services provided in NECS to assure the compliance of a Transaction with requirements

Transacting Party A party that is directly involved in a Transaction, being a Party Relinquishing or a Party Receiving

Transaction The processes required to effect a change in a Land Registry’s Torrens Title Register

Users A Natural Person authorised by a Subscriber to use NECS on behalf of the Subscriber

Workspace A resource that is used to gather information and prepare documents, such as the facility used for gathering conveyancing information and preparation of Registry Instruments, Information Reports and Settlement Certifications for Electronic Conveyancing

Workspace Verification A NECS process that verifies the compliance of the Duty Assessment and the Lodgment Case in a Workspace at that point in time

XML An acronym for eXtensible Markup Language, being a means of associating content with information that can be used to infer the meaning of that content and its structural relationships to other content






been superseded






9. Source Materials

Document Description

Black v Garnock [2007] HCA 31 per Callinan J. at paras 52 & 53

Birrell, Barry, Hall and Barker, Is the Torrens System Suitable for the 21st Century

Clayton UTZ, Risk Assessment of the National Electronic Conveyancing System (9 February 2007).

HM Land Registry, England &Wales, Chain Matrix Prototype Evaluation Report, 2007

KPMG, Economic Appraisal of Electronic Conveyancing in NSW

Land and Property Management Authority, NSW:

Electronic Settlement, Electronic Lodgment and Automated Registration of Real Property Dealings in NSW, 2004

Public Consultation Document Feedback Report, 2005

NSW Forms Survey, 2005

Title Search Market Trends, 2006

Comparison Matrix - Current Paper-Based Conveyancing Process, Future Electronic Conveyancing Process, 2008

Draft NSW Land Registry Structured Business Vocabulary, 2009

Business Rule Statement Templates, 2009

Lynden Griggs, Torrens Title in a Digital World

National Electronic Conveyancing Office:

NECS National Business Model (version 10, 15 June 2007).

NECS National Requirements Definition (version 6, 3 September 2008).

NPT Issue Papers:

Workspace Creation, 29/5/2009

Workspace Population 29/5/2009

Transaction Assurance 29/5/2009

Lodgment Acceptability 29/5/2009

Transaction Assurance Refined 13/7/2009

Transaction Assurance Further Refined 31/7/2009

Further Transaction Assurance Matters 15/01/2010

Data Supply, 27/11/2009

Object Management Group, Semantics of Business Vocabulary and Business Rules, 2008

Sir Robert Torrens, Essay on the Transfer of Land by Registration circa 1882

10. Appendices






been superseded

Appendix A: Example of Conventional Title Search for the Sydney Opera House






been superseded






been superseded

Appe

ndix

B: D

escr

iptio

n of

Act

iviti

es in

Cur

rent

Pap

er B

ased

Con

veya

ncin

g Pr

oces

s

CURR

ENT

PRO

CESS

Co

ntra

ct P

repa

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on

Exch

ange

Se

ttle

men

t Pr

epar

atio

n

Sett

lem

ent

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men

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d Re

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on

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n

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/

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nt r

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t Sys

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t Let

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t Agr

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form

s a

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nt Id

entit

y Ve

rific

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n an

d Cl

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Aut

hori

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n

Per

form

s co

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ny s

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pany

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k pe

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ity (d

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tor/

secr

etar

y) a

nd fo

r ou

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mpa

ny c

harg

es)

Obt

ain

the

pres

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ed d

ocum

ents

un

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C(SL

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ther

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t pra

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e do

cum

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(eg

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ert,

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e sh

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ey, b

uild

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cert

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te, T

itle

and

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an

d w

arra

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s

Obt

ain

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stry

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rmat

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and

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ity C

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rig

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rec

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with

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exch

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hold

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keys

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app

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lo

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and

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that

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agr

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cl

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form

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FI o

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sitio

n (if

re

quir

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been superseded

CURR

ENT

PRO

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Co

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Exch

ange

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r

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stru

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to

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and

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rific

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form

s co

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o ch

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pers

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ority

(d

irec

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etar

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r ou

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spe

cial

con

ditio

ns

and

com

plet

ion

date

if to

be

othe

r th

an 4

2 da

ys

Dat

es c

ontr

act,

obta

ins

purc

hase

r’s

sign

atur

e to

con

trac

t an

d in

stru

ctio

ns to

exc

hang

e

On

exch

ange

rec

eive

s or

igin

al

cont

ract

exe

cute

d by

pur

chas

er

Com

plet

es e

xcha

nge

by

prov

idin

g co

unte

rpar

t con

trac

t da

ted

and

exec

uted

by

purc

hase

r, c

ertif

icat

e w

aivi

ng

cool

ing

off p

erio

d an

d an

y ou

tsta

ndin

g de

posi

t mon

eys

in

favo

ur o

f sta

keho

lder

Con

trac

t bec

omes

unc

ondi

tiona

l

Con

duct

s fu

rthe

r se

arch

es (E

PA, R

oad,

Ra

il, H

erita

ge e

tc) a

nd c

onta

cts

Coun

cil

and

othe

r age

ncie

s fo

r ra

tes

due,

Lan

d Ta

x, b

ody

corp

orat

e fe

es, r

enta

l in

com

e et

c.

Rec

eive

s Co

unci

l and

oth

er a

genc

y in

form

atio

n, in

clud

ing

Land

Tax

Ce

rtifi

cate

Cal

cula

te rate

adju

stm

ents

for

Sett

lem

ent S

tate

men

t

Sen

ds L

and

Tax

Cert

ifica

te to

ven

dor’

s so

licito

r /

conv

eyan

cer

for

clea

ranc

e (if

ap

plic

able

)

Pro

vide

s pr

oper

ty in

form

atio

n an

d re

quir

ed d

ocum

ents

to In

com

ing

FI

Pre

pare

s Tr

ansf

er In

stru

men

t and

NO

S fo

rm a

nd s

igns

Tra

nsfe

r on

beh

alf o

f pu

rcha

ser

(whe

re in

stru

ctio

n ha

s be

en

give

n)

Con

trac

t and

Tra

nsfe

r st

ampe

d pr

ior

to

sett

lem

ent a

nd S

tam

p D

uty

paid

(e

ither

in-h

ouse

or a

t OSR

)

Pre

pare

s D

uty

Dis

burs

emen

t for

pa

ymen

t via

Set

tlem

ent o

r di

rect

to

OSR

Per

form

s re

quir

ed S

tam

p D

utie

s re

cord

ke

epin

g

Sen

ds o

rigi

nal T

rans

fer

to v

endo

r’s

solic

itor

/ co

nvey

ance

r fo

r si

gnin

g by

ve

ndor

Pre

pare

s se

ttle

men

t sta

tem

ent a

nd

send

s to

ven

dor’

s so

licito

r /

conv

eyan

cer

Sen

ds in

form

atio

n an

d co

py o

f Tra

nsfe

r to

Inco

min

g FI

Arr

ange

s Se

ttle

men

t Dat

e w

ith

vend

or’s

sol

icito

r /

conv

eyan

cer

Con

firm

s Se

ttle

men

t tim

e an

d pl

ace

with

Ven

dors

sol

icito

r /

conv

eyan

cer

& P

urch

aser

s FI

(N

ote:

this

is o

ften

don

e in

the

sam

e co

mm

unic

atio

n as

sen

ding

se

ttle

men

t fig

ures

)

Rec

eive

s in

stru

ctio

n fr

om

purc

hase

r th

at F

inal

Insp

ectio

n is

sa

tisfa

ctor

y

Pre

pare

s ch

eque

s fo

r pri

vate

fu

nds

bein

g co

ntri

bute

d

Req

uest

s Ti

tle S

earc

h an

d pe

rfor

ms

Lodg

men

t / S

ettle

men

t A

ccep

tabi

lity

Chec

k

Att

ends

Set

tlem

ent L

oca

tion

– Pu

rcha

ser'

s so

licito

r /

conv

eyan

cer

veri

fies

Tran

sfer

an

d pr

ovid

es th

e co

mpl

eted

NO

S fo

rm. S

ettle

men

t eff

ecte

d an

d ch

eque

(s) d

istr

ibut

ed

Sen

ds c

hequ

es fo

r ou

tsta

ndin

g pa

ymen

ts a

nd ra

tes

to

appr

opri

ate

loca

tion(

s). T

his

incl

udes

Lan

d Ta

x th

at w

as

agre

ed o

n be

ing

clea

red

at

Sett

lem

ent

Sen

ds in

voic

e/re

ceip

t and

se

ttle

men

t let

ter

to P

urch

aser

Clo

ses

File

(sub

ject

to r

e-op

enin

g in

cas

e of

req

uisi

tions

by

LR)

Res

pond

s to

re

quis

ition

and

su

pplie

s in

form

atio

n to

pur

chas

ers

FI o

r re

ctifi

es r

equi

sitio

n (if

re

quir

ed)






been superseded

CURR

ENT

PRO

CESS

Co

ntra

ct P

repa

rati

on

Exch

ange

Se

ttle

men

t Pr

epar

atio

n

Sett

lem

ent

Lodg

men

t an

d Re

gist

rati

on

Post

Reg

istr

atio

n

Out

goin

g

Fina

ncia

l In

stit

utio

n (F

I)

Rec

eive

s no

tice

of in

tent

to s

ell

prop

erty

and

dis

char

ge m

ortg

age

Rec

eive

s re

ques

t for

adv

ice

on

loca

tion

of a

dditi

onal

sec

urity

ce

rtifi

cate

s fr

om v

endo

r’s

solic

itor

/ co

nvey

ance

r (e

g D

A a

ppro

val)

Con

firm

s CT

loca

tion

(or

LR C

oRD

re

cord

) and

pro

visi

onal

pay

out f

igur

e to

ven

dor

P

repa

res

and

sign

Dis

char

ge o

f M

ortg

age

Rec

eive

set

tlem

ent d

ate

Pro

vide

s pa

y-ou

t fig

ure

Rec

eive

s co

nfir

mat

ion

of

Sett

lem

ent

time

and

loca

tion

Att

ends

Set

tlem

ent L

oca

tion

- Se

ttle

men

t eff

ecte

d. C

hequ

e fo

r pa

y-ou

t am

ount

rec

eive

d,

Dis

char

ge o

f Mor

tgag

e an

d CT

di

stri

bute

d.

Clo

ses

File

(sub

ject

to r

e-op

enin

g in

cas

e of

req

uisi

tions

by

LR)

Res

pond

s to

re

quis

ition

and

su

pplie

s in

form

atio

n to

pur

chas

ers

FI o

r re

ctifi

es r

equi

sitio

n (if

re

quir

ed)

Inco

min

g Fi

nanc

ial

Inst

itut

ion

(FI)

Rec

eive

s lo

an a

pplic

atio

n an

d FH

OG

fr

om p

urch

aser

/mor

tgag

or

Col

lect

s pu

rcha

ser/

mor

tgag

or

deta

ils, p

rope

rty

deta

ils, p

urch

aser

so

licito

r /

conv

eyan

cer

det

ails

, ca

ptur

es p

urch

aser

(Clie

nt) a

nd

tran

sact

ion

data

in m

ortg

age

proc

essi

ng s

yste

m

Per

form

s CI

V of

pu

rcha

ser/

mor

tgag

or

Com

men

ces

loan

app

licat

ion

proc

essi

ng

Req

uest

s Re

gist

ry In

form

atio

n an

d Ti

tle A

ctiv

ity

Chec

k su

bscr

iptio

n

Req

uest

s sp

ecifi

c pr

oper

ty s

earc

hes

from

Pur

chas

er (i

f re

quir

ed)

Sub

mits

FH

OG

app

licat

ion

to O

SR

App

rove

s lo

an a

pplic

atio

n

P

repa

res

and

send

s lo

an

docu

men

tatio

n pa

ckag

e co

ntai

ning

M

ortg

age

and

loan

agr

eem

ent d

irec

t to

purc

hase

r/m

ortg

agor

, inc

ludi

ng

Mor

tgag

e D

uty

Paya

ble

Per

form

s M

ortg

age

Dut

y A

sses

smen

t as

req

uire

d

Rec

eive

set

tlem

ent i

nfor

mat

ion

and

copy

of T

rans

fer

Req

uest

s Ti

tle S

earc

h an

d pe

rfor

ms

Lodg

men

t / S

ettle

men

t A

ccep

tabi

lity

Chec

k

Att

ends

Set

tlem

ent L

oca

tion

- Se

ttle

men

t eff

ecte

d. C

hequ

e(s)

di

stri

bute

d. A

ll ot

her

inst

rum

ents

and

doc

umen

ts

colle

cted

for

lodg

men

t

Whe

n se

ttle

men

t con

firm

ed,

crea

te s

acc

ount

(s) a

nd d

raw

do

wn

to “

pay”

for

bank

che

ques

.

Pro

cess

es a

nd p

ays

Mor

tgag

e D

uty

Rel

ease

s FH

OG

to

purc

hase

r/m

ortg

agor

Lod

ges

Regi

stry

In

stru

men

ts, C

T,

supp

ortin

g ev

iden

ce

and

NO

S as

a c

ase

eith

er d

irec

t with

Re

gist

ry o

r vi

a lo

dgm

ent a

gent

Rec

eive

s re

quis

ition

re

ques

t an

d di

rect

s to

app

ropr

iate

par

ty

(if r

equi

red)

Rec

tifie

s re

quis

ition

(if

requ

ired

)

Re

ceiv

es C

T an

d re

gist

ered

ori

gina

l M

ortg

age

Cl

oses

File

CSP/

Br

oker

R

ecei

ves

requ

ests

for

Title

Sea

rch,

D

ealin

g Co

pies

, Reg

istr

y In

form

atio

n,

TAC

and

othe

r In

form

atio

n Se

arch

(s)

Pro

vide

s se

arch

resu

lts

Pro

vide

s Va

lue

add

serv

ices

(eg

Prac

tice

Man

agem

ent S

ervi

ces)

A

s di

rect

ed r

eque

sts

and

prov

ides

Lan

d Ta

x Ce

rtifi

cate

As

dire

cted

req

uest

s an

d pr

ovid

es L

and

Tax

Clea

ranc

e Q

uote

As

dire

cted

per

form

s ca

lcul

atio

ns o

n ra

te a

djus

tmen

ts (S

ettle

men

t A

djus

tmen

t Cal

cula

tor)

As

dire

cted

pro

cess

es S

tam

p D

uty

Tran

sact

ion

As

dire

cted

pro

cess

es M

ortg

age

Dut

y Tr

ansa

ctio

n






been superseded

CURR

ENT

PRO

CESS

Co

ntra

ct P

repa

rati

on

Exch

ange

Se

ttle

men

t Pr

epar

atio

n

Sett

lem

ent

Lodg

men

t an

d Re

gist

rati

on

Post

Reg

istr

atio

n

Land

Regi

stry

(L

R)

Rec

eive

s, p

roce

sses

and

del

iver

s Ti

tle

Sear

ch, D

ealin

g Co

pies

, Reg

istr

y In

form

atio

n an

d TA

C su

bscr

iptio

n to

Br

oker

as

requ

este

d

Pro

vide

s ad

ditio

nal i

nfor

mat

ion

sear

ch r

esul

ts a

s re

ques

ted,

in

clud

ing:

His

tori

cal s

earc

h

Lea

se F

olio

Dat

a Ex

trac

t

Doc

umen

t inq

uiry

Pla

n in

quir

y

Sub

Fol

io S

earc

h

CT

Inqu

iry

Sear

ch

Str

eet A

ddre

ss In

quir

y

SIG

A S

earc

h

CW

O S

earc

h

Rec

eive

s, p

roce

sses

and

del

iver

s Ti

tle S

earc

h to

pur

chas

er’s

so

licito

r /

conv

eyan

cer

and

In

com

ing

FI a

s re

ques

ted

Rec

eive

s, p

re-

exam

ines

and

lodg

es

Lodg

men

t Cas

e or

re

turn

s fo

r co

rrec

tion.

Inv

oice

s Lo

dgm

ent

fees

and

tak

es

paym

ent (

whe

re

clie

nt is

pre

sent

at

Regi

stry

)

Per

form

s m

anua

l ex

amin

atio

n,

incl

udin

g D

uty

Com

plia

nce

Exam

inat

ion

Req

uisi

tions

Reg

istr

y In

stru

men

t(s)

if

requ

ired

Reg

iste

rs L

odgm

ent

Case

NO

S O

CR’d

Iss

ues

dupl

icat

e CT

Per

form

s im

agin

g of

al

l doc

umen

ts

Pub

lishe

s do

cum

ents

(a

s re

quir

ed)

Ret

urns

Del

iver

able

D

ocum

ents

to

Lodg

ing

Part

y w

ith

new

CT

Des

troy

s O

rigi

nal

Doc

umen

ts (a

fter

ho

ldin

g pe

riod

)

Rec

eive

s pa

ymen

t ag

ains

t inv

oice

Off

ice

of

Stat

e Re

venu

e (O

SR)

Rec

eive

s an

d pr

oces

ses

FHO

G

appl

icat

ions

and

pro

vide

s re

sult

to

Inco

min

g FI

(whe

re r

elev

ant)

Thr

ough

web

-ser

vice

s pr

ovid

es

Stam

p D

uty

estim

atio

n

R

ecei

ves

Land

Tax

Cer

tific

ate

requ

est

Pro

vide

s La

nd T

ax C

ertif

icat

e

Rec

eive

s La

nd T

ax C

lear

ance

Quo

te

requ

est

Pro

vide

s La

nd T

ax C

lear

ance

Quo

te

Rec

eive

s an

d as

sess

es S

tam

p D

uty

Tran

sact

ion

Pro

vide

s St

amp

Dut

y A

sses

smen

t re

port

Rec

eive

s St

amp

Dut

y pa

ymen

t

Rec

eive

s M

ortg

age

Dut

y pa

ymen

t

Rel

ease

s FH

OG

Val

idat

es D

uty

Paym

ents

, sta

mps

do

cum

ent(

s) a

nd

note

s al

tera

tions

Oth

er

Age

ncy

Rec

eive

s re

ques

t, in

clud

ing

rate

s, b

ody

corp

orat

e fe

es e

tc (v

ario

us a

genc

ies)

Pro

vide

s Se

arch

es (v

ario

us a

genc

ies)

Rec

eive

s N

OS

info

rmat

ion

(as

requ

ired

)






been superseded

Des

crip

tion

of A

ctiv

ities

in F

utur

e El

ectr

onic

Con

veya

ncin

g Pr

oces

s Bo

ld t

ext

mea

ns N

ECS

rela

ted

acti

vity

FUTU

RE

PRO

CESS

Co

ntra

ct P

repa

rati

on

Exch

ange

Se

ttle

men

t Pr

epar

atio

n Se

ttle

men

t Lo

dgm

ent

and

Regi

stra

tion

Po

st R

egis

trat

ion

Ven

dors

Solic

itor

/

Conv

ey-

ance

r

Rec

eive

s in

stru

ctio

ns fr

om v

endo

r

Ent

ers

vend

or (C

lient

) det

ails

in C

lient

re

gist

er o

r Le

gal P

ract

ice

Man

agem

ent S

yste

m (L

PMS)

and

ge

nera

tes

Enga

gem

ent L

ette

r

Rec

eive

s si

gned

Cos

t Agr

eem

ent a

nd

Enga

gem

ent L

ette

r fr

om v

endo

r

Per

form

s a

Clie

nt Id

enti

ty

Ver

ifica

tion

and

sec

ures

Clie

nt

Aut

hori

sati

on t

o se

ttle

thr

ough

NEC

S

Per

form

s co

mpa

ny s

earc

h if

vend

or is

a

com

pany

(to

chec

k pe

rson

s au

thor

ity (d

irec

tor/

secr

etar

y) a

nd fo

r ou

tsta

ndin

g co

mpa

ny c

harg

es)

Obt

ain

the

pres

crib

ed d

ocum

ents

un

der

C(SL

)R a

nd o

ther

bes

t pra

ctic

e do

cum

ents

(eg

s149

(5) C

ert,

sew

er

refe

renc

e sh

eet,

surv

ey, b

uild

ing

cert

ifica

te, T

itle

and

othe

r se

arch

es,

deal

ing

copi

es) f

or v

endo

r di

sclo

sure

an

d w

arra

ntie

s

Obt

ain

Regi

stry

Info

rmat

ion

and

Title

A

ctiv

ity C

heck

sub

scri

ptio

n

Est

ablis

hes

vend

or’s

rig

ht-t

o-de

al fo

r th

e sp

ecifi

ed tr

ansa

ctio

n, C

T lo

catio

n or

LR

CoRD

rec

ord

Pre

pare

s dr

aft C

ontr

act,

obta

ins

vend

or’s

con

firm

ator

y in

stru

ctio

n,

and

forw

ards

pho

toco

py to

Rea

l Es

tate

Age

nt

Rec

eive

s sa

les

advi

ce fr

om R

eal

Esta

te A

gent

Neg

otia

tes

with

pur

chas

er’s

sol

icito

r /

conv

eyan

cer

and

fina

lises

Con

trac

t

Dat

es c

ontr

act,

obta

ins

vend

or’s

si

gnat

ure

to c

ontr

act a

nd

inst

ruct

ions

to e

xcha

nge

On

exch

ange

pro

vide

s pu

rcha

ser’

s so

licito

r /

conv

eyan

cer

with

ori

gina

l co

ntra

ct e

xecu

ted

by v

endo

r

Eff

ects

exc

hang

e by

rec

eivi

ng

coun

terp

art c

ontr

act d

ated

and

ex

ecut

ed b

y pu

rcha

ser,

ce

rtifi

cate

wai

ving

coo

ling

off

peri

od a

nd a

ny o

utst

andi

ng

depo

sit m

oney

s in

favo

ur o

f st

akeh

olde

r

Con

trac

t bec

omes

unc

ondi

tiona

l

Cre

ates

NEC

S w

orks

pace

and

rec

eive

s W

orks

pace

ID

Pro

vide

s Re

gist

ry In

form

atio

n an

d TA

C su

bscr

ipti

on fo

r W

orks

pace

Est

ablis

hes

all o

ther

par

ties

invo

lved

in

the

tran

sact

ion,

incl

udin

g ne

cess

ary

sim

ulta

neou

s se

ttle

men

ts

Add

s ad

diti

onal

Sub

scri

bers

to

Wor

kspa

ce fo

r ot

her

role

s

Lia

ise

and

agre

e w

ho w

ill b

e Re

spon

sibl

e Su

bscr

iber

(w

ho w

ill b

e re

spon

sibl

e fo

r pa

ymen

t of

fees

)

Obt

ains

nec

essa

ry c

onse

nts

Sen

ds A

utho

rity

to D

isch

arge

Mor

tgag

e to

out

goin

g FI

for

sett

lem

ent

Rec

eive

s La

nd T

ax C

ertif

icat

e fo

r cl

eara

nce

(if a

pplic

able

)

Req

uest

s La

nd T

ax c

lear

ance

Quo

te

from

OSR

(if a

pplic

able

)

Rec

eive

s La

nd T

ax c

lear

ance

Quo

te (i

f ap

plic

able

)

Pay

s La

nd T

ax c

lear

ance

am

ount

to O

SR

and

cert

ifica

te c

lear

ed (i

f app

licab

le),

or

Land

Tax

pay

men

t inc

lude

d as

di

sbur

sem

ent i

n Se

ttle

men

t (if

avai

labl

e as

an

optio

n).

Pop

ulat

es T

rans

fer

Inst

rum

ent

Fin

alis

es s

ettle

men

t dat

e an

d tim

e w

ith

purc

hase

r’s

solic

itor

/ co

nvey

ance

r

Con

firm

s di

scha

rge

payo

ut f

igur

e fr

om

outg

oing

FI

Pop

ulat

es S

ettl

emen

t St

atem

ent

deta

ils (e

.g. d

isbu

rsem

ents

co

rres

pond

ing

to c

ounc

il, in

form

atio

n re

ceiv

ed fr

om p

urch

aser

’s s

olic

itor

/

conv

eyan

cer

)

Rev

iew

cor

rect

ness

of t

rans

acti

on a

nd

its

supp

orti

ng e

vide

nce

Dig

ital

ly s

igns

Tra

nsfe

r w

ith

cert

ifica

tion

s

Dig

ital

ly s

igns

Set

tlem

ent

Stat

emen

t w

ith

cert

ific

atio

ns

Rec

eive

s Pr

e-se

ttle

men

t Co

mpl

ianc

e Re

sult

and

sto

ps

sett

lem

ent

if ne

cess

ary

Rec

eive

s ad

vice

of s

ucce

ssfu

l se

ttle

men

t

Adv

ises

dep

osit

hold

er (u

sual

ly

R.E.

Age

nt) t

o re

leas

e re

mai

nder

of

dep

osit

and

hand

over

the

keys

Pay

s La

nd T

ax c

lear

ance

am

ount

to

OSR

and

cer

tific

ate

clea

red

(if

Land

Tax

pay

men

t inc

lude

d as

di

sbur

sem

ent i

n Se

ttle

men

t)

Sen

ds in

voic

e/re

ceip

t and

se

ttle

men

t let

ter

to V

endo

r

Rec

eive

s ad

vice

of

succ

essf

ul lo

dgm

ent

Rec

tifi

es

requ

isit

ione

d in

stru

men

ts (i

f re

quir

ed) a

nd

digi

tally

re-

sign

s

Rec

eive

s ad

vice

of

succ

essf

ul

regi

stra

tion

Rec

eive

s pa

ymen

t of

fee

from

ven

dor

Arc

hive

s tr

ansa

ctio

n do

cum

enta

tion

(CIV

, CA

, sup

port

ing

evid

ence

)

Clo

ses

file






been superseded

FUTU

RE

PRO

CESS

Co

ntra

ct P

repa

rati

on

Exch

ange

Se

ttle

men

t Pr

epar

atio

n Se

ttle

men

t Lo

dgm

ent

and

Regi

stra

tion

Po

st R

egis

trat

ion

Purc

hase

rs

Solic

itor

/

Conv

ey

-anc

er

Rec

eive

s in

stru

ctio

ns fr

om p

urch

aser

to

act

on

purc

hase

and

fina

nce

Ent

ers

purc

hase

r (C

lient

) det

ails

in

Clie

nt r

egis

ter

or L

PMS

and

gene

rate

s En

gage

men

t Let

ter

Rec

eive

s si

gned

Cos

t Agr

eem

ent a

nd

Enga

gem

ent L

ette

r fr

om p

urch

aser

Per

form

s a

Clie

nt Id

enti

ty

Ver

ifica

tion

and

sec

ures

Clie

nt

Aut

hori

sati

on t

o se

ttle

thr

ough

NEC

S

Per

form

s co

mpa

ny s

earc

h if

purc

hase

r is

a c

ompa

ny (t

o ch

eck

pers

ons

auth

ority

(d

irec

tor/

secr

etar

y) a

nd fo

r ou

tsta

ndin

g co

mpa

ny c

harg

es)

Rec

eive

s sa

les

advi

ce fr

om re

al e

stat

e ag

ent a

nd d

raft

con

trac

t fro

m

vend

or’s

sol

icito

r /

conv

eyan

cer

Rev

iew

s Co

ntra

ct fr

om v

endo

r’s

solic

itor

/ co

nvey

ance

r a

nd o

pens

Se

ttle

men

t File

Obt

ains

qua

lity

repo

rts

as r

equi

red

(eg

build

ing

and

pest

)

Loo

kup

and

prov

ide

Dut

y A

dvic

e to

pu

rcha

ser

Obt

ains

up-

to-d

ate

Title

Sea

rch

if se

arch

or

copy

title

in c

ontr

act i

s st

ale

Con

firm

s th

at p

urch

aser

has

un

cond

ition

al fi

nanc

e ap

prov

al,

incl

udin

g FH

OG

whe

re a

pplic

able

Neg

otia

tes

with

ven

dor’

s so

licito

r /

conv

eyan

cer

any

spe

cial

con

ditio

ns

and

com

plet

ion

date

if to

be

othe

r th

an 4

2 da

ys

Dat

es c

ontr

act,

obta

ins

purc

hase

r’s

sign

atur

e to

con

trac

t an

d in

stru

ctio

ns to

exc

hang

e

On

exch

ange

rec

eive

s or

igin

al

cont

ract

exe

cute

d by

pur

chas

er

Com

plet

es e

xcha

nge

by

prov

idin

g co

unte

rpar

t con

trac

t da

ted

and

exec

uted

by

purc

hase

r, c

ertif

icat

e w

aivi

ng

cool

ing

off p

erio

d an

d an

y ou

tsta

ndin

g de

posi

t mon

eys

in

favo

ur o

f sta

keho

lder

Con

trac

t bec

omes

unc

ondi

tiona

l

Rec

eive

s W

orks

pac

e ID

and

acc

epts

invi

tati

on

to jo

in N

ECS

Wor

ksp

ace

Con

duct

s fu

rthe

r se

arch

es (E

PA

, Roa

d, R

ail,

Her

itag

e et

c) a

nd

cont

acts

Cou

ncil

and

oth

er

agen

cies

for

rate

s du

e, L

and

Tax,

bod

y co

rpor

ate

fees

, ren

tal i

nco

me

etc.

Rec

eive

s C

ounc

il an

d o

ther

age

ncy

info

rmat

ion,

incl

udin

g La

nd T

ax C

erti

ficat

e

Sen

ds L

and

Tax

Cer

tific

ate

to v

end

or’s

sol

icito

r /

conv

eyan

cer

for

clea

ranc

e (i

f app

licab

le)

Sen

ds C

ounc

il an

d o

ther

info

rmat

ion

to

vend

or’s

sol

icit

or /

con

veya

ncer

for

pr

epar

atio

n of

Set

tlem

ent

Stat

emen

t

In s

om

e ju

risd

icti

ons

Prio

rity

Not

ice

pop

ulat

ed, d

igit

ally

sig

ned

and

lod

ged

Pop

ulat

es T

rans

fer

Inst

rum

ent

Pop

ulat

es M

ortg

age

Inst

rum

ent

Pop

ulat

es N

otic

e of

Sal

e

Ass

esse

s Tr

ansf

er S

tam

p D

uty

via

ED

R, s

tam

ps

Cont

ract

and

pop

ulat

es D

uty

Ass

essm

ent

Num

ber

(DA

N) i

n T

rans

fer

Inst

rum

ent

Fin

alis

e se

ttle

men

t dat

e an

d t

ime

Pop

ulat

es S

ettl

emen

t St

ate

men

t de

tails

(S

uppl

ier

Stat

emen

t fo

r so

urce

s of

fun

ds)

Per

form

s re

quir

ed S

tam

p D

uty

rec

ord

keep

ing

Pre

pare

s D

uty

Dis

burs

emen

t for

pay

men

t via

Se

ttle

men

t or

dire

ct t

o O

SR

Rev

iew

s co

rrec

tnes

s of

tra

nsac

tio

n an

d it

s su

ppor

ting

evi

den

ce

Req

uest

s W

orks

pace

Ver

ific

atio

n a

nd r

ecei

ve

Dut

y V

erif

icat

ion

and

Lod

gme

nt V

erif

icat

ion

Dig

ital

ly s

igns

Tra

nsfe

r In

stru

men

t w

ith

cert

ific

atio

ns

Dig

ital

ly s

igns

ne

w M

ortg

age

Inst

rum

ent

w

ith

cert

ific

atio

ns

Dig

ital

ly s

igns

Not

ice

of S

ale

wit

h

cert

ific

atio

ns

Dig

ital

ly s

igns

Su

pplie

r St

atem

ent

wit

h ce

rtif

icat

ions

Rec

eive

s in

stru

ctio

n fr

om p

urch

aser

tha

t Fin

al

Insp

ectio

n is

sat

isfa

ctor

y an

d to

pro

ceed

to

sett

lem

ent

Rec

eive

s Pr

e-se

ttle

men

t Co

mpl

ianc

e Re

sult

and

sto

ps

sett

lem

ent

if ne

cess

ary

Rec

eive

s ad

vice

of s

ucce

ssfu

l se

ttle

men

t

Sen

ds in

voic

e/re

ceip

t and

se

ttle

men

t let

ter

to P

urch

aser

Rec

eive

s ad

vice

of

succ

essf

ul lo

dgm

ent

Rec

tifi

es

requ

isit

ione

d in

stru

men

ts (i

f re

quir

ed) a

nd

digi

tally

re-

sign

s

Rec

eive

s ad

vice

of

succ

essf

ul

regi

stra

tion

Rec

eive

s pa

ymen

t of

fee

from

ven

dor

Arc

hive

s tr

ansa

ctio

n do

cum

enta

tion

(CIV

, CA

, sup

port

ing

evid

ence

)

Clo

ses

file






been superseded

FUTU

RE

PRO

CESS

Co

ntra

ct P

repa

rati

on

Exch

ange

Se

ttle

men

t Pr

epar

atio

n Se

ttle

men

t Lo

dgm

ent

and

Regi

stra

tion

Po

st R

egis

trat

ion

Out

goin

g Fi

nanc

ial

Inst

itut

ion

(FI)

Rec

eive

s no

tice

of in

tent

to s

ell

prop

erty

and

dis

char

ge m

ortg

age

Rec

eive

s re

ques

t for

adv

ice

on

loca

tion

of a

dditi

onal

sec

urity

ce

rtifi

cate

s fr

om v

endo

r’s

solic

itor

/ co

nvey

ance

r (e

g D

A a

ppro

val)

Con

firm

s CT

loca

tion

(or

LR C

oRD

re

cord

) and

pro

visi

onal

pay

out f

igur

e to

ven

dor

R

ecei

ves

Wor

kspa

ce ID

and

acc

epts

in

vita

tion

to

join

NEC

S W

orks

pace

Pop

ulat

es D

isch

arge

of M

ortg

age

Inst

rum

ent

Pop

ulat

es C

AC

(or

cons

ent

of C

T en

titl

emen

t w

here

no

CT is

sued

)

Pop

ulat

es p

ayou

t fig

ure

in S

ettl

emen

t St

atem

ent

Rev

iew

s co

rrec

tnes

s of

tra

nsac

tion

an

d it

s su

ppor

ting

evi

denc

e

Dig

ital

ly s

igns

Dis

char

ge o

f M

ortg

age

Inst

rum

ent

wit

h ce

rtifi

cati

ons

Dig

ital

ly s

igns

Set

tlem

ent

Stat

emen

t w

ith

cert

ific

atio

ns

Re

ceiv

es P

re-s

ettl

emen

t Co

mpl

ianc

e Re

sult

and

sto

ps

sett

lem

ent

if ne

cess

ary

Re

ceiv

es a

dvi

ce o

f suc

cess

ful

sett

lem

ent

Re

ceiv

es p

aym

ent

via

RBA

Re

ceiv

es a

dvi

ce o

f su

cces

sful

lod

gmen

t

Re

ctif

ies

requ

isit

ione

d in

stru

men

ts (i

f re

quir

ed) a

nd

digi

tally

re-

sign

s

Rec

eive

s ad

vice

of

succ

essf

ul

regi

stra

tion

Arc

hive

s tr

ansa

ctio

n do

cum

enta

tion

(CIV

, CA

, Sup

port

ing

Evid

ence

)

Clo

ses

file






been superseded

FUTU

RE

PRO

CESS

Co

ntra

ct P

repa

rati

on

Exch

ange

Se

ttle

men

t Pr

epar

atio

n Se

ttle

men

t Lo

dgm

ent

and

Regi

stra

tion

Po

st R

egis

trat

ion

Inco

min

g Fi

nanc

ial

Inst

itut

ion

(FI)

Rec

eive

s lo

an a

pplic

atio

n an

d FH

OG

fr

om p

urch

aser

/mor

tgag

or

Col

lect

s pu

rcha

ser/

mor

tgag

or d

etai

ls,

prop

erty

det

ails

, pur

chas

er s

olic

itor

/ co

nvey

ance

r d

etai

ls, c

aptu

res

purc

hase

r (C

lient

) and

tran

sact

ion

data

in m

ortg

age

proc

essi

ng s

yste

m

Per

form

s CI

V of

pur

chas

er/m

ortg

agor

Com

men

ces

loan

app

licat

ion

proc

essi

ng

Req

uest

s Re

gist

ry In

form

atio

n an

d Ti

tle A

ctiv

ity

Chec

k su

bscr

iptio

n

Req

uest

s sp

ecifi

c pr

oper

ty s

earc

hes

from

Pur

chas

er (i

f re

quir

ed)

Sub

mits

FH

OG

app

licat

ion

to O

SR

App

rove

s lo

an a

pplic

atio

n

P

repa

res

and

send

s lo

an

docu

men

tatio

n pa

ckag

e co

ntai

ning

M

ortg

age

and

loan

agr

eem

ent d

irec

t to

pur

chas

er/m

ortg

agor

, inc

ludi

ng

Mor

tgag

e D

uty

Paya

ble

Rec

eive

sig

ned

loan

and

mor

tgag

e do

cum

ents

from

Pur

chas

er/M

ortg

agor

(C

lient

) and

upd

ates

dat

a in

mor

tgag

e pr

oces

sing

sys

tem

Rec

eive

s W

orks

pace

ID a

nd a

ccep

ts

invi

tati

on t

o jo

in N

ECS

Wor

kspa

ce

Lia

ise

and

agre

e to

bec

ome

Resp

onsi

ble

Subs

crib

er (

who

will

be

resp

onsi

ble

for

paym

ent

of fe

es)

Pop

ulat

es M

ortg

age

Inst

rum

ent

Pop

ulat

es R

espo

nsib

le S

ubsc

ribe

r an

d O

ptio

nal C

T in

stru

ctio

n in

Mor

tgag

e In

stru

men

t

Per

form

s M

ortg

age

Dut

y A

sses

smen

t as

req

uire

d

Pop

ulat

es D

AN

in M

ortg

age

Inst

rum

ent

Rev

iew

cor

rect

ness

of t

rans

acti

on a

nd

its

supp

orti

ng e

vide

nce

Req

uest

s W

orks

pace

Ver

ifica

tion

and

re

ceiv

e D

uty

Ver

ifica

tion

and

Lo

dgm

ent

Ver

ific

atio

n

Dig

ital

ly s

igns

Mor

tgag

e In

stru

men

t w

ith

cert

ific

atio

ns

Dig

ital

ly s

igns

Sup

plie

r St

atem

ent

wit

h ce

rtif

icat

ions

Cre

ate

acco

unt(

s) a

nd d

raw

dow

n to

“p

ay”

for

sett

lem

ent a

mou

nt

Rec

eive

s Pr

e-se

ttle

men

t Co

mpl

ianc

e Re

sult

and

sto

ps

sett

lem

ent

if ne

cess

ary

Rec

eive

s ad

vice

of s

ucce

ssfu

l se

ttle

men

t

Acc

ount

s re

flect

pay

men

ts m

ade

Rec

eive

s ad

vice

of

succ

essf

ul lo

dge

men

t

Rec

eive

s lo

dgm

ent

fee

invo

ice

from

NEC

S

Rec

tifi

es

requ

isit

ione

d in

stru

men

ts (i

f re

quir

ed) a

nd

digi

tally

re-

sign

s

Rec

eive

s ad

vice

of

succ

essf

ul

regi

stra

tion

and

CT

from

LR

Arc

hive

s tr

ansa

ctio

n do

cum

enta

tion

(CIV

, CA

, Sup

port

ing

Evid

ence

)

Clo

ses

file






been superseded

FUTU

RE

PRO

CESS

Co

ntra

ct P

repa

rati

on

Exch

ange

Se

ttle

men

t Pr

epar

atio

n Se

ttle

men

t Lo

dgm

ent

and

Regi

stra

tion

Po

st R

egis

trat

ion

NEC

S

Clie

nt Id

entit

y Ve

rific

atio

n an

d Cl

ient

A

utho

risa

tion

tem

plat

es m

ade

avai

labl

e fo

r us

e by

Sub

scri

bers

W

orks

pace

cre

ated

by

Subs

crib

er a

nd

NEC

S al

loca

tes

Wor

kspa

ce ID

NEC

S in

vite

s no

min

ated

Sub

scri

bers

to

the

Wor

kspa

ce &

pro

vide

s W

orks

pace

ID

Wor

kspa

ce p

opul

ated

wit

h Re

gist

ry

Info

rmat

ion

and

TAC

subs

crip

tion

All

part

ies

popu

late

tra

nsac

tion

in

form

atio

n in

the

Wor

kspa

ce

App

lies

juri

sdic

tion

bus

ines

s ru

les

as

tran

sact

ion

info

rmat

ion

is p

opul

ated

Req

uest

s D

uty

veri

fica

tion

che

ck w

ith

OSR

and

ret

urn

Dut

y V

erif

icat

ion

Repo

rt

Req

uest

s TA

C w

ith

LR a

nd n

otify

pa

rtie

s of

any

cha

nges

to

Reg

istr

y In

form

atio

n

Ret

urns

com

plia

nce

resu

lt t

o Su

bscr

iber

s

72

hour

s be

fore

sch

edul

ed

sett

lem

ent

init

iate

s W

orks

pace

V

erifi

cati

on

Sen

ds D

uty

Ver

ific

atio

n re

ques

t to

OSR

and

rec

eive

com

plia

nce

re

sult

Sen

ds L

odgm

ent

Case

to

LR fo

r Lo

dgm

ent

Ver

ific

atio

n an

d re

ceiv

e Pr

e-se

ttle

men

t Co

mpl

ianc

e Re

sult

Sen

ds P

re-s

ettl

emen

t Co

mpl

ianc

e Re

sult

to

part

icip

atin

g Su

bscr

iber

s

If t

rans

acti

on is

rea

dy a

nd

lodg

men

t is

acc

epta

ble,

fina

ncia

l se

ttle

men

t ta

kes

plac

e fo

r a

Sett

lem

ent

Case

and

lodg

men

t ta

kes

plac

e fo

r a

Lodg

men

t-on

ly

Case

Ass

embl

es a

nd s

ends

Set

tlem

ent

Batc

h to

FSM

Not

ifies

par

tici

pati

ng

Subs

crib

ers

of s

ucce

ssfu

l set

tlem

ent

Pre

pare

s an

d se

nds

lodg

men

t fe

e in

voic

e to

Res

pons

ible

Su

bscr

iber

Ini

tiat

es D

irec

t D

ebit

for

lodg

men

t tr

ansa

ctio

n

Tra

nsm

its

Lodg

men

t Ca

se t

o LR

fo

r lo

dgem

ent

NEC

S w

orks

pace

no

tifie

d of

lod

gmen

t an

d D

ealin

g nu

mbe

r(s)

Not

ify a

ll pa

rtie

s of

su

cces

sful

lod

gmen

t

Wor

kspa

ce n

otifi

ed

of r

equi

siti

on

Wor

kspa

ce n

otifi

ed

of D

ealin

g Re

gist

rati

on

Not

ify a

ll pa

rtie

s of

su

cces

sful

re

gist

rati

on






been superseded

FUTU

RE

PRO

CESS

Co

ntra

ct P

repa

rati

on

Exch

ange

Se

ttle

men

t Pr

epar

atio

n Se

ttle

men

t Lo

dgm

ent

and

Regi

stra

tion

Po

st R

egis

trat

ion

Land

Re

gist

ry

(LR)

Rec

eive

s, p

roce

sses

and

del

iver

s Ti

tle

Sear

ch, D

ealin

g Co

pies

, Reg

istr

y In

form

atio

n an

d TA

C su

bscr

iptio

n to

Br

oker

as

requ

este

d

Pro

vide

s ad

ditio

nal i

nfor

mat

ion

sear

ch r

esul

ts a

s re

ques

ted

(eg,

Pla

n in

quir

y, S

ub F

olio

Sea

rch,

CT

Inqu

iry

Sear

ch, S

tree

t Add

ress

Inqu

iry)

R

ecei

ves

Wor

kspa

ce R

egis

try

Info

rmat

ion

and

TAC

subs

crip

tion

re

ques

t

Sen

ds R

egis

try

Info

rmat

ion

and

init

iate

TA

C su

bscr

ipti

on

On

requ

est,

per

form

s Lo

dgm

ent

Ver

ifica

tion

and

ret

urns

Lod

gmen

t Co

mpl

ianc

e Re

port

Rec

eive

s el

ectr

onic

Lod

gmen

t Ca

se, p

erfo

rm L

odgm

ent

Acc

epta

bilit

y Ch

eck

and

send

re

sult

to

NEC

S

Lod

gmen

t co

nfir

mat

ion

and

Dea

ling

num

ber(

s)

sent

to

NEC

S

Ele

ctro

nic

exam

inat

ion

base

d on

Bus

ines

s Ru

les

Whe

re a

ll Bu

sine

ss

Rule

s ar

e pa

ssed

, au

tom

atic

ally

reg

iste

r

If n

o, m

anua

l ex

amin

atio

n,

requ

isiti

on if

ne

cess

ary,

and

m

anua

l reg

istr

atio

n

Sen

d N

ECS

regi

stra

tion

no

tific

atio

n

Del

iver

s CT

to

Resp

onsi

ble

Subs

crib

er, o

r N

o-CT

re

cord

Mor

tgag

ee

cont

rolli

ng p

arty

de

tails

CSP/

Br

oker

R

ecei

ves

requ

ests

for

Title

Sea

rch,

D

ealin

g Co

pies

, Reg

istr

y In

form

atio

n,

TAC

and

othe

r In

form

atio

n Se

arch

(s)

Pro

vide

s se

arch

resu

lts

Pro

vide

s Va

lue

add

serv

ices

(eg

Prac

tice

Man

agem

ent S

ervi

ces)

Off

ice

of

Stat

e Re

venu

e (O

SR)

Rec

eive

s an

d pr

oces

ses

FHO

G

appl

icat

ions

and

pro

vide

s re

sult

to

Inco

min

g FI

(whe

re r

elev

ant)

Thr

ough

web

-ser

vice

s pr

ovid

es

Stam

p D

uty

estim

atio

n

Rece

ives

Lan

d Ta

x Ce

rtifi

cate

req

uest

Pr

ovid

es L

and

Tax

Cert

ifica

te

Re

ceiv

es L

and

Tax

Clea

ranc

e Q

uote

re

ques

t

Pr

ovid

es L

and

Tax

Clea

ranc

e am

ount

Re

ceiv

es a

nd a

sses

ses

Stam

p D

uty

Tran

sact

ion

Pr

ovid

es S

tam

p D

uty

Ass

essm

ent

repo

rt, i

nclu

ding

DA

N

Re

ceiv

es S

tam

p D

uty

paym

ent

Re

ceiv

es D

uty

Ver

ific

atio

n re

ques

t an

d re

turn

res

ult

Rec

eive

s Tr

ansf

er a

nd M

ortg

age

Dut

y pa

ymen

ts

Rel

ease

s F

HO

G






been superseded

FUTU

RE

PRO

CESS

Co

ntra

ct P

repa

rati

on

Exch

ange

Se

ttle

men

t Pr

epar

atio

n Se

ttle

men

t Lo

dgm

ent

and

Regi

stra

tion

Po

st R

egis

trat

ion

Oth

er

Age

ncy

Re

ceiv

es r

eque

st, i

nclu

ding

rat

es,

body

cor

pora

te fe

es e

tc (v

ario

us

agen

cies

)

Pr

ovid

es S

earc

hes

(var

ious

age

ncie

s)

FSM

and

Res

erve

Ban

k co

mpl

etes

fina

ncia

l tra

nsac

tion

s

Sen

ds N

ECS

sett

lem

ent

noti

ficat

ion

Rec

eive

s d

isbu

rsem

ents

Rec

eive

s N

OS

info

rmat

ion

(as

requ

ired

)






been superseded

Appendix C: Introduction to the Business Rules Approach

The Business Rules Approach

The Business Rules Approach involves development of:

• a structured business vocabulary comprising o a glossary of terms and their meanings for use in defining business rules for preparing and

compliance assurance of documentation of transactions for registration o definition of the facts that constitute the relationships between the terms in the glossary

• business rule statements for manual and automated application in preparation and compliance assurance of documents for lodgment and registration;

The Approach facilitates sharing of Land Registry knowledge and rules with NECS and conveyancing industry participants for facilitating automated processing.

Structured Business Vocabulary

The structured business vocabulary provides a glossary of terms, their definitions and the relationships between the terms in a formal manner that provides a consistent basis for writing business rules. This means identifying common business concepts (‘things’) that may have different names, but have the same semantic meaning. While the business concept identifiers used by each jurisdiction may be different between Land Registries, jurisdictions or business sectors, the business concepts can be aligned to provide the framework for exchange of information.

The glossary will contain the terms used in the National Electronic Conveyancing Data Standard, as well as NSW specific terms such that the NSW Land Registry (or any other stakeholder using the same approach) can map and translate information between the national data standard and their jurisdiction systems and terminology.

Business Rules

Business rules are the constraints that an organisation applies to achieve its aims and mitigate associated risks. Business rules are derived from internal management policies and practices and from external sources such as legislation and common law decisions.

The Business Rules Approach is based on the fact that business rules can be managed more effectively if they are documented in a standardised manner in a single location and managed as a “single source of truth”.

The Land Registry will use a centrally managed rule repository to store the business rules. This means that:

• business rules statements can be written in a natural business English so that they are consistent, complete and facilitates the rules to have a single meaning interpreted by all users

• existing documented and “unwritten” business knowledge and business rules can be captured in a consistent manner that will support both manual and automated compliance processes

• business rules statements can be efficiently updated and published in response to changes in legislation, policy or practice

Business Rules and their application for lodgment and registration in the Torrens Title Register

The NSW Land and Property Management Authority (Lands), Land and Property Information (LPI) Division, maintains the integrity of the Torrens title register through the application of business rules to the lodgment, examination and registration processes. Some of the rules are applied automatically within the Integrated Titling System (ITS), whilst the majority are applied manually by trained Officers.






been superseded

These business rules are currently being collected into the single source repository from the following sources:

o legislation, e.g. Real Property Act 1900, Conveyancing Act 1919 o Registrar General’s Directions o instructions for completing registry instrument forms o fact sheets and circulars (Lands web site) o internal examination policies, procedures and guides o documentation for business processing systems.

Business rules and relationship with NECS

The introduction of NECS will require the development and publication of business rules for:

o practice requirements for preparing, certifying and signing electronic instruments o instrument data prepared by users in case management systems prior to loading into NECS o electronic preparation, validation and verification of instruments prepared in NECS o the national data standard for electronic communication of instruments o automated compliance checks before settlement and lodgment of instruments o automated electronic lodgment and examination at the Land Registry.

Progress with NSW Land Registry Business Rules

To date, the NSW NECS Readiness Program has:

o conducted an investigation to understand and scope the work required to undertake a business rules approach to system development

o developed a NSW Land Registry Structured Business Vocabulary (SBV) to record: o relevant business terms with their definitions and attributes o fact types that express core business knowledge in terms of relationships between the

business terms o adopted the OMG Semantics of Business Vocabulary and Business Rules as the international

reference standard for documenting its business rules o developed Standard Statement Templates for Business Rules for use by the Land Registry o evaluated candidate software and procured a business rule repository meeting the requirements of

the Land Registry and suitable for sharing content with other jurisdictions and conveyancing industry participants

o commenced the collection and documentation of standardised business rules required for facilitating electronic conveyancing.

The NSW Land Registry Structured Business Vocabulary (SBV) consists of a glossary, taxonomy of terms, and fact model (relationships between terms) that will be used to write clear and concise business rules. Please refer to the following location for the SBV file: http://necsnsw.lands.nsw.gov.au/__data/assets/pdf_file/0011/100055/NSW_LR_Structured_Business_Vocabulary_June_10_2009.pdf

The Standard Statement Templates for Business Rules contains the taxonomy of business rule statement types and the rules about writing standardised business rule statements. http://necsnsw.lands.nsw.gov.au/__data/assets/pdf_file/0018/103428/Business_Rule_Statement_Templates_June_10_2009v2.pdf






been superseded



Appendix D: Scope of Information for Registry Information

Registry Information Land Title Information included as:

1 a Land Title Search (report) as discrete XML data, and 2 XML data in categories 2a to 2c as shown below

1.Land Title Report Requirement Reference ID Land Title Reference Essential Certificate of Title Edition No. Essential Date of current Certificate of Title Essential Land Description Plan Reference ID Optional Land Description, Locality Optional Title Diagram Reference ID Optional First Schedule Registered Proprietor of an Estate Essential Tenancy Essential Share Essential Estate Essential Part Ownership Details, Part Description Essential Registry Instrument type Essential Dealing number Essential Second Schedule Notification Essential Notification code Essential Dealing number, Plan number Essential Registry Instrument type Essential Additional Details Essential Registered Proprietor of an Interest in Land Essential Schedule of Entitlements (Common Property Folios only) Land Title References (lot only) Initially out-of-scope Unit Entitlements Initially out-of-scope Schedule of Parcels (Auto-Consol Folios Only) Land Descriptions Essential Land Registry Note Miscellaneous Notes Essential Unregistered Documents Dealing number Essential Plan number Essential 2a.Control of the Right-to-Deal (CoRD) Details Party holding Control of the Right to Deal Printed CT or No-CT Essential Name Essential Delivery address Essential 2b.Property Details Valuation property ID Essential Street address Essential 2c.Land Registry Delivery Details Date & time of Issue Essential Name and ID of searching party Essential Delivery address Essential Registry signature Essential






been superseded

Appendix E: Lodgment Verification Report – draft concept for discussion

Response Component

Response Information Sub-component

Example Content

Lodgment NECS Workspace ID: N3456789 Verification ID Verification Request

Timestamp 13:16HRS 26/02/2010

Verification Report Timestamp

13:26HRS 26/02/2010

Lodgment Acceptability Advice

Acceptable for Lodgment:

NO71

TAC Report72 Title Reference: 5/775888 TAC commencement 07/02/2010 Title Activity: YES

Activity Timestamp / Status:

19/02/2010 04:15PM LODGMENT

20/02/2010 10:05AM REGISTRATION Document: TRANSMISSION APPLICATION AB123456

Activity Timestamp / Status:

24/02/2010: 11:23AM LODGMENT

Document: CAVEAT AB129123 Lodgment Fees Lodgment fees payable DISCHARGE OF MORTGAGE / 1 $95.00 TRANSFER / 2 $190.00 MORTGAGE / 3 $95.00 LODGMENT FEE TOTAL $380.00 Registration Compliance Report

Registration non-compliance report

Non-compliance with mandatory rules: DISCHARGE OF MORTGAGE /1 1. Each Registry Instrument must specify at least one

Land title Reference (L) 2. A registry instrument counterpart must be signed

by an accredited Certifier for the Subscriber (L)

TRANSFER /2 TITLE REFERENCE 5/775888 3. Each Land Title Reference specified in a Registry

Instrument must be suitable for electronic conveyancing (L)

MORTGAGE /3 4. Each Party Relinquishing specified in a Mortgage

Instrument that references a Land Title must be the same as one of the following: • a Registered Proprietor of an Estate that is

registered on the Land Title • a Registered Proprietor of an Estate that is to

be registered on the Land Title prior to the Mortgage instrument

71 The non-compliance with business rules for Lodgment are indicated in the Registration Compliance Report with “(L)”. 72 There would be a TAC report for each Land Title for which a TAC Subscription had been purchased in the Lodgement Case.






been superseded

Land and Property Management Authority Head office 1 Prince Albert Road Queens Square SYDNEY NSW 2000

T 1300 052 637 61 2 8236 7173

www.lpma.nsw.gov.au

© March 2010 Land and Property Management Authority




been superseded