Alignment with the National Mortgage Form
In the last 12 months there have been changes to the processes for each land registry across Australia (collectively referred to as the Land Registry) to accommodate e-settlements as we move towards an ‘alignment’ of forms and procedures across all jurisdictions.
The process of aligning all jurisdictions to using a uniform set of forms and procedures serves the purpose of ‘encouraging’ practitioners to use the Electronic Lodgement Network (ELN) platform, known as Property Exchange Australia (PEXA). Together with the introduction of the National Mortgage Form (NMF), PEXA aims to simplify the settlement process for practitioners, mortgagee and users. However, one hindrance experienced with using PEXA is the requirement that all parties to a transaction must agree to transact on PEXA. As a result, paper transacting will still continue despite efforts to move towards e-settlements.
Australia-wide, registrars from each jurisdiction are now progressively aligning most paper dealings with a view to solely conducting paperless settlements through PEXA. Currently, all jurisdictions except Tasmania, ACT, and NT have commenced transacting on PEXA.
New National Mortgage Form
The NMF is a new nationally-uniform mortgage document, with its initial implementation commencing in May 2017. Mortgagees and practitioners across all jurisdictions will need to adopt the NMF instead of the current
registry instrument mortgage form used in each Land Registry over the next
6 – 12 months.
The NMF does not affect dealings such as mortgage common provisions or other standard condition dealings currently registered with each Land Registry, however mortgagees and practitioners should use this as an opportunity to review ancillary or additional schedules to their clients’ mortgage precedent forms in connection with the NMF rollout.
NMF Certification
An item that many mortgagees and practitioners should turn their attention to with the new NMF is the proposed certifications sub-panel contained in the NMF. The NMF requires that the mortgagee, practitioner or agent (the Certifier) make certifications regarding the mortgagor, the mortgagee and the mortgage itself.
The certifications needing to be completed will vary across the different jurisdictions, depending on who is the Certifier. Below is an outline as to which certifications can be expected in each jurisdiction.
A list of all certifications made by the Certifier, as provided under the NFM, are:
- The Certifier is reasonably satisfied that the mortgagee it represents has taken reasonable steps to verify the identity of the mortgagor.
- The Certifier has taken reasonable steps to verify the identity of the mortgagee.
- The Certifier holds a properly completed Client Authorisation for the Conveyancing Transaction including this Registry Instrument or Document.
- The Certifier has retained the evidence supporting this Registry Instrument or Document.
- The Certifier has taken reasonable steps to ensure that this Registry Instrument or Document is correct and compliant with relevant legislation and any Prescribed Requirement.
- The Certifier, or the Certifier is reasonably satisfied that the mortgagee it represents,:
a) has taken reasonable steps to verify the identity of the mortgagor; and
(b) holds a mortgage granted by the mortgagor on the same terms as this Registry Instrument or Document.
NMF Certification for Representatives to consider – Verification of Identity
A legal practitioner, agent or conveyancer (Representative) acting on behalf of a mortgagee should be aware of the required certification pursuant to statement 2. Gone are the days of simply signing a paper mortgage as a solicitor on behalf of the mortgagee, as is current practice in Qld, WA and NSW, as certification statement 2 places a requirement on the Representative to take reasonable steps to identify their client (the mortgagee).1
ARNECC have released a Client Authorisation Form (CAF) for mortgagees or their attorney to execute, providing a specific or standing authority to Certifiers to transact or execute documents (i.e. the NFM) on their behalf. An updated version of the CAF was scheduled to be released on 27 May 2017. In addition, the person/attorney who signs the CAF (on behalf of the mortgagee/client) will need their identity verified by the Certifier. Together, an executed CAF and the verification of identity will satisfy the requirement of the Certifier to verify the identity of the mortgagee pursuant to certification statement 2.
NMF Practitioner Certification – Across each Jurisdiction
Although the NMF is uniform, the required certifications for the NMF will vary for each Land Registry. Using the above numbering, we have compiled a list of the certifications the Certifier will be required to provide across each Land Registry for the NMF.
Mortgages signed by the mortgagor (and often also the mortgagee) and lodged with the Land Registry 2 (Full Paper)
- For the ACT, TAS and VIC (where only the mortgagor executes the mortgage), no certifications are required;
- For the NT, no certifications are required;
- For QLD, no certifications are required;
- For NSW, the following certifications are required:
- When the mortgagee is certifying on their own behalf: certifications 1, 4 and 5; and
- When the mortgagee is represented by a Representative: certifications 1, 2, 3, 4 and 5;
- For SA, (where the NMF has already been released) the following certifications are required:
- When the mortgagee is certifying on their own behalf: certifications 4, 5 and 6; and
- When the mortgagee is represented by a Representative: certifications 2, 3, 4, 5 and 6; and
- For WA, the following certifications are required:
- When the mortgagee is certifying on their own behalf: certifications 1, 4 and 5; and
- When the mortgagee is represented by a Representative: certifications 2, 3, 4, 5 and 6.
Mortgages signed by the mortgagee only and lodged with the Land Registry, certifying that they hold a separate mortgage granted by the mortgagor (Paper Lodge)
- NSW, SA, VIC and WA, when the mortgagee is certifying on their own behalf: certifications 4, 5 and 6; and
- NSW, SA, VIC and WA, where the mortgagee is represented by a Representative: certifications 2, 3, 4, 5 and 6.
Certifications and the Electronic Lodgement Network
The certifications for the NMF above also apply when transacting on the ELN through PEXA. The execution and lodgement of mortgages through PEXA requires certifications 1, 2, 3, 4 and 5 to be made. A Representative cannot sign or lodge on PEXA without making these declarations prior to lodgement.
Practically speaking, as a transacting party on PEXA is required to hold the paper instrument in their custody at the time of lodging on PEXA, that transacting party is able to rely on the certifications made in the paper NMF when they certify on PEXA.
Access to the NMF
On 27 May 2017, each Land Registry through their respective websites has released a downloadable version of the NMF. We have listed below the links to each Land Registry and their mortgage forms:
- Queensland
- New South Wales
- Australian Capital Territory
- Victoria
- South Australia
- Western Australia
- Tasmania – Use the online Land Registry program LIST to create the NMF
- Northern Territory
- ARNECC have also created an online template with a jurisdiction specific NMF
Transition Period
A transition period of six months to 31 December 2017 has been suggested for lodgement of the current and the new NMF. The various Land Registries will accept paper lodgement from the 1 January 2018 on an approved form of paper mortgage that has been prepared, signed and dated prior to 1 January 2018. Any mortgage signed and dated after 31 December 2017 will need to be on the NMF. Northern Territory is the only jurisdiction that will accept a pre-NMF mortgage after 31 December 2017.
More Information
For more information or if you have any further queries regarding the NMF, PEXA or ELN please contact Victor Asoyo, Partner or Daniel Wangatau, Solicitor at Gadens Lawyers.
1 National Mortgage Form Design Specification – Version 1.5 – page 84 – 86.
2 National Mortgage Form Design Specification – Version 1.5 – page 6 – 7.
