Do I Need my Title Deed?

Do I Need My Title Deed?

Before the commencement of the Land Title Act 1994 in Queensland, each lot of freehold had a certificate of title and the whereabouts of that certificate of title was critical. Giving a title deed to someone could be evidence that you were intending to leave it as security for a loan and this was commonly known as an equitable mortgage – ie where there was no written mortgage, but the conduct of the parties showed that a deed was given as security. Going back further, the giving of a mortgage essentially operated to transfer the ownership of the property to the mortgagee, again the possession of the title deed was critical.

On the introduction of the Land Title Act in 1994, the concept of electronic title came about. Lawyers were very excited about these changes, and not necessarily in a good way, but as time went on the changes were accepted. Previously, all dealings with the title were shown on the title deed itself, and possession of the deed was critical, as no dealings could be registered without it. On the commencement of the Land Title Act, a new form of title deed would issue only if requested and instead, the records of transactions on title were kept electronically. A lot of people however still wanted a hard copy of their title. The people who would be entitled to it included mortgagees (who would like to have the title issued so that no further dealings could be registered on title without their knowledge) and owners. Gradually over time less people obtained hard copies of the title deeds, it was by 2019 relatively infrequent to see one on issue.

As and from 1 October 2019 however, the Land Title Act is amended with the effect that the certificate of title will cease to have any legal effect. This means that regardless of whether a title has been issued, dealings with the title can be registered without the title deed being returned to the Department of Natural Resources, Mines and Energy.

The effect of this is that:

Mortgagees will no longer have any increased security against subsequent dealings on the property by holding a certificate of title;
The giving of a certificate of title as security for an equitable mortgage will be ineffective;
As an owner, holding the certificate of title will give no protection against fraud.

These changes should not have any adverse effect on most people. People holding title deeds as security however will essentially lose the benefit of that security, and it will be more important to lodge formal securities such as a mortgage.

If you are concerned about potential dealings on your land or of your position as a secured creditor, there may be steps that can be taken. If you have any questions in that regard, please contact Peter Muller at peterm@qbmlaw.com.au or Sally Chipman at sallyc@qbmlaw.com.au