Protecting home buyers during settlement
A priority notice is a notification of intended dealing or dealings with land placed on the Torrens Title Register. For example, if you have agreed to buy a property and intend to lodge a transfer, you can register a priority notice to hold your interest in place on title up until settlement.
Priority notices can protect consumers during a scheduled transaction, providing assurance that their interest is known to others from the time the notice is lodged through to settlement.
A priority notice provides protection for 60 days and can be extended for an additional 30-day period. This covers the majority of settlement periods and is a simple low cost, time-limited alternative to lodging a caveat.
When a priority notice is registered, it will temporarily prevent new legal interests in the land being registered for the duration of the priority notice.
Why use a priority notice?
A priority notice can provide peace of mind during a settlement process than can often be stressful for sellers and purchasers.
You should ask your solicitor or conveyancer about lodging a priority notice and the protection it can provide for what is potentially one of the biggest purchases in your life.
Benefits of priority notices
- Increased level of protection to property buyers during the settlement process. Over the past decade, average property settlement times have increased. According to 2018 NSW Land Registry Services held data, the average length of settlement was 59 days, an increase from 2010 when it was 50 days.
- Simpler and cheaper alternative to a caveat. A priority notice can reduce risks associated with a settlement of 90 days or less at minimal cost.
- Lodging is quick and easy, as you only need to submit the transferee’s name and title details when registering online.
How to lodge a priority notice to protect a home buyer
Solicitors and conveyancers can lodge priority notices on behalf of their clients using Electronic Lodgment Network Operator (ELNO).
The easiest and quickest way to gain the protection of a priority notice is to lodge one for the planned transfer document. All planned dealings do not need to be listed on the priority notice.
Only details that are needed to process a priority notice:
1. Document type. This should only list the document protecting your client’s interest.
2. Land Title reference
3. The name of the person or people buying the property. Your client’s name(s) needs to be entered exactly as shown on your document.
Withdrawing a priority notice
When a priority notice is lodged, it will remain effective until it is withdrawn or until it lapses by expiry or on registration of the Transfer after settlement. A recorded priority notice can easily be withdrawn at any time prior to its expiry by lodging a Withdrawal of Priority Notice.
Extending a priority notice
The person who lodged the priority notice may apply to have the priority notice extended once, for an additional 30 days giving a total of 90 days from the date of lodgement.
Protect your buyer rights by using a priority notice
In Black v Garnock [2007] HCA 31, the High Court of Australia found against the purchaser in considering the priority of interests. The purchaser had a contract of sale and settled the property but in the intervening period a writ had been recorded on the land title. The High Court ruled that the writ and subsequent transfer by the Sheriff were valid.
In light of the decision of the High Court, purchasers and legal practitioners acting for purchasers would be advised to consider lodging a priority notice following exchange of contracts. This will assist in protecting the purchaser's interest between exchange and completion.
Find out more
Read our:
For more information, visit the RG Guidelines on priority notices
or contact your solicitor or conveyancer.