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Why the sale of Victoria’s Land Titles Registry will never be a good thing

Why the sale of Victoria’s Land Titles Registry will never be a good thing

By LIV president Belinda Wilson

Conveyancing Real Property 

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Last week, the LIV called for the state government to abandon its proposal to privatise the Victorian land registry (LTO). That’s a huge call, especially when the potential sale is expected to provide a mammoth short-term windfall for the state government. This is on the back of the recent sale of the New South Wales Titles Office at $2.6 billion for 35 years.

Our members have been very vocal and have led the charge against privatisation. As lawyers, we are at the coalface in land property transactions and are as a result also at the forefront of consumer protection. Rightly so, our members have been questioning why, with changing regulations, should our profession be the consumer safeguard whilst the state government pushes for privatisation that will result in fewer protections for consumers?

Although there are many reasons against privatisation, here’s a look at the top three:

 

1. Data security, privacy and fraud 
Our online presence is growing greater day by day, whether we like it or not. With the introduction of electronic conveyancing and mandatory electronic titles, we have to be optimistic that the state government is keeping our most personal data safe.

Will that level of public trust be so in relation to the sale of the LTO? Not only will our land registry details at the mercy of a private third party, but so too will the significant volume of sensitive data that sits behind each transaction: full name, date of birth, addresses, consideration (i.e. monetary or otherwise), not to mention the metadata attached to search functions performed through the LTO.

Across businesses which are reliant on technology, we are seeing a rise in company data being compromised. Yet no assurances have been given to date about what safeguards the government will impose on an impending LTO purchaser or the level of oversight- if any- the government will provide.

The privatisation of the system lends itself to exploitation and fraud, in addition to the inadvertent disclosure of private details.

With 855,000 transfers, mortgages and mortgage discharges registered in the 2015/2016 financial year, that is a lot of data that could fall into someone else’s hands, be held to ransom, or sold as an additional source of revenue. 

 

2. Safe guarding the integrity of the system
The system currently operates on stringent measures, which the majority of us will have come up against at some stage in our career by receiving requisitions from the LTO, or as a result of us questioning the validity of dealings.

Will this remain the case upon the sale and relinquishment of control to a third party provider? Currently, the LTO is required to provide reasons for refusal of any dealings and the Registrar can be summoned to appear in the Supreme or County Court. However, with privatisation will this remain the case? How can the same responsibilities be placed on a private CEO?

It is also concerning that a private CEO will have the primary legal duty to act in the best interests of the company shareholders over any duty to the Victorian public in managing the registry.

Every search that is conducted in relation to real estate is done through the LTO. Every title search and planning certificate application relies on the accuracy of the LTO data. It is imperative that the data and systems are 100 per cent reliable, with no tolerance for errors or incorrect or incomplete data.

 

3. Anti competitive behaviour, transparency and accountability
Out of necessity, the LTO is a monopoly. However, take that away from a government environment with a commercial overlay, and this is where anti-competitive behaviour can be problematic.

Every transaction of a proprietary nature needs to go through the LTO. That includes discharge of mortgages, transfers of land, applications by surviving proprietors or by legal personal representatives and caveats to name just a selection.

Firstly, the LTO is accountable for the delivery of its services and the quality of those services. In the 2015/2016 financial year, 99 per cent of land dealings were registered within 5 days.

What measures can be put in place to ensure that a private provider will provide this high level of service with consumer protection measures? It is reasonable to assume that in order to improve the bottom line, services will be cut, resulting in a blow-out of transaction times and an increase in errors made.

Secondly, what measures can be put in place to ensure that a private operator has an incentive to provide a quality service at a reasonable price when there is no competitor? Apart from protecting the bottom line as above, there are two additional sources of revenue which a private operator could exploit:

  1. increased fees that consumers are required to pay for dealings and searches; and
  2. sale of private household information collected by the LTO.

Neither of these options gives us much comfort that the interests of the Victorian public will be put first.

The LIV will continue to oppose any sale for short-term financial gain.


Disclaimer: Views expressed by commentators are not necessarily endorsed by the Law Institute of Victoria Ltd (LIV). No responsibility is accepted by the LIV for the accuracy of information contained in the comments and the LIV expressly disclaims any liability for, with respect to or arising from any such views.

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