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From the President: Torrens title for the 21st century

Cite as: July 2014 88 (07) LIJ, p.4

Harmonised property laws are within reach.

By Geoff Bowyer, LIV President

How do we ensure a 19th century system best serves 21st century businesses and individuals?

Last month, I met with a Property Law Reform Alliance (PLRA) consultant. The PLRA was established in 2003 as a joint initiative of the Australian Property Law Group of the Law Council of Australia (LCA) and the Property Council of Australia. The PLRA is a coalition of legal and industry associations of which the LIV is a long-standing member. It is committed to achieving uniform real property laws and procedures in Australia in order to facilitate property transactions and it aims to achieve this outcome through discussions with government representatives and the development of a model Uniform Torrens Title Act.

While discussing the significant progress made by the e-conveyancing initiative, which is anticipated to become functional this year, the PLRA said it considered that this shift towards harmonisation of property laws presents an opportune time to contemplate property law reform on a national scale.

This gave me cause to question to what extent our property laws require reform. Since inception, the Torrens title system has been heralded internationally for its efficiency, certainty and simplicity. True, it is not without its critics, though even critics of the Torrens title system most often articulate flaws not in its fundamental principles but rather in its implementation. Years of legislative tinkering have resulted in significant disparities in the treatment of property transactions between states and territories, needlessly complicating transactions, creating inevitable delays, red tape and unnecessary costs to trade and commerce. The rules surrounding property transactions are determined by the state or territory in which an individual or business is operating, frustrating investment and making Australia less competitive internationally.

How then do we go about ensuring that a 19th century system best provides for 21st century transactions? Just think how difficult practice would be if we didn’t have corporations law or consumer and competition legislation covering all Australian states and territories.

The e-conveyancing initiative through its engagement with new technologies and consequent ability to “move with the times” is a step in the right direction. The PLRA is similarly pursuing harmonised property laws but through a Uniform Torrens Title Act, which seeks to remove any discrepancies that currently exist between jurisdictions, promote efficiencies in property law, facilitate property transactions, and promote investment. The PLRA supports the e-conveyancing initiative and stresses the need for these two initiatives to move forward in a complementary fashion.

The adoption of national uniform laws would not be a novel undertaking for Australia. Harmonised corporations laws have made it easier for companies to invest and operate across Australia by reducing inefficiencies and removing red tape. The PLRA considers that a similar overhauling of property laws would ensure Australia continues to be attractive to local and international investors.

Encouraging investment is not the only claimed benefit of adopting uniform property laws. According to the PLRA, harmonisation would enable states and territories to establish the most efficient, rigorous, and fair system for managing property transactions, reduce the costs and transaction timeframes for vendors, purchasers, lessors and lessees, and ensure practitioners have the capacity and knowledge to represent interstate clients effectively.

So will we see national property laws move forward with the same momentum as e-conveyancing?

With the first draft of a Uniform Torrens Title Act already consulted on and a revised draft on the way, it’s clear that harmonised property laws are within reach. It will take continued effort, including the PLRA’s next challenge to consider a cost benefit analysis in order to quantify the possible productivity benefits and savings that could be achieved through harmonisation.

The adoption of national property laws might appear to be a long-term goal but with the backing of the Property Council of Australia and the LCA, along with the support of the LIV and other property and legal industry groups, this initiative might have just enough leverage to move very quickly onto the national law reform agenda.

For further information on the Uniform Torrens Title Act contact Rebekah Farrell at rfarrell@liv.asn.au.

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