Written by Property Exchange Australia (PEXA) is a key platform for facilitating electronic lodgements in Australian real property transactions. One critical step in the PEXA process is conducting a final title search before settlement. This ensures that all legal interests in the property are identified, including the seller’s right to sell and any encumbrances, such as caveats or mortgages.
The recent case Cui v Salas-Photiadis [2024] NSWSC 1280 highlights the risks of neglecting this step. In the case, the plaintiff was purchasing a property in Blakehurst, NSW, for $4.35 million with a Westpac loan. Before settlement, a caveat was lodged on the property by the first defendant, asserting a charge under a loan agreement. However, no participant in the PEXA workspace noticed the caveat, and the settlement proceeded. Afterward, Westpac received a requisition from Land Registry Services (LRS) stating that the transfer and mortgage could not be registered due to the caveat. This underscores the importance of final title searches to prevent delays or legal disputes.
Final title searches are especially important when dealing with government departments undergoing name changes due to administrative reforms. For instance, the title change of the Minister for Education in 2021 could cause discrepancies in land titles. A final title search ensures such discrepancies are identified and corrected before settlement. All participants in a PEXA workspace must conduct a final title search before settlement to ensure smooth transactions and avoid complications with encumbrance or discrepancies in the property title.