Baird government's privatisation of NSW Land Titles Registry to lift costs for home buyers

The NSW government has passed legislation to be able to sell the NSW Land Titles Registry to the highest bidder. Photo: Arsineh Houspian

The NSW government has passed legislation to be able to sell the NSW Land Titles Registry to the highest bidder. Photo: Arsineh Houspian

The Baird government is close to selling off NSW's "world-class" land titles registry, outraging lawyers, academics and property professionals who warn consumers will have to pay more for a lesser service.

Local and overseas banks, insurance companies and superannuation funds are understood to be among the potential buyers for the registry.

The sale is expected to yield more than $700 million, which the NSW government aims to splash on new sports stadia, but experts across the property sector are appalled, saying the registry is world-class, efficient and consistently raking in $50 million a year.

Margaret Hole, former president of the NSW Law Society, said that privatisation could make title insurance a necessity for home buyers, as commonly seen in the US.

Margaret Hole, a former president of the NSW Law Society, says after the sale, consumers may need to start buying title insurance. Photo: Dominic Lorrimer

Margaret Hole, a former president of the NSW Law Society, says after the sale, consumers may need to start buying title insurance. Photo: Dominic Lorrimer

She said a home buyer would have to pay about $990 for title insurance on the purchase of a $1.4 million property.

"Last year 213,000 transfers were lodged thus if title insurance is required then, on a conservative estimate, $210 million would be raised by the successful operator, mounting to $744 billion over a period of 35 years [the length of the government contract]," she said.

Ms Hole expressed concerns about the lack of a transparency, independent assessment and public consultation.

Under Australia's Torrens title system, land titles are guaranteed by the government and the occurrence of fraud is rare. A Certificate of Title is an official land-ownership record.

Michael Green, president of the Institution of Surveyors NSW, said the introduction of title insurance could quietly undermine and eventually replace the government guarantee.

A Certificate of Title is an official land ownership record. Photo: Rob Young

A Certificate of Title is an official land ownership record. Photo: Rob Young

"Land surveyors and perhaps those in the legal professions will be under pressure from their insurers to pay higher insurance premiums in response to the increased risk of creating land titles," he said.

A land surveyor, Tony Proust, said insurers had already warned him that professional indemnity insurance premiums will have to rise, which would then have to be passed onto customers, pushing up the cost of housing.

This week Treasury instructed potential buyers to formally express their interest with sale advisor JPMorgan before the end of the month.

Interested parties include overseas companies such as Serco and Borealis Infrastructure's Teranet, local players such as PEXA and Link Group, and infrastructure managers such as Hastings and Macquarie's MIRA.

The UK government was forced to abandon its plans to privatise its land registry after a public uproar over the fact every potential bidder was linked to tax havens.

Treasure Gladys Berejiklian told Fairfax Media that privatisation was necessary as it was in the best position to invest in technology that will bring major benefits for consumers.

"Prices of regulated services will only be permitted to increase by up to CPI, which will provide a more stable and predictable pricing framework for customers," she said.

"The NSW government will retain full ownership of all land title data and data must be stored in Australia. The government will also have strong step-in powers to operate the business under the concession where it is in the public interest to do so."

But ahead of the sale, the NSW government hiked application fees for title registrations and the determination of title boundaries by 25 per cent.

Mohsen Kalantari​, a land administration expert at the University of Melbourne, said having worked closely with NSW land title staff in implementing new technology and pushing the registry into the digital age, it wasn't clear what else the private sector could offer.

He said all states and territories were working together to modernise their land titles registries, and they were watching NSW's sell-off with interest.

He said title offices underpin billions of dollars of economic activity every year and the robust systems helped shield Australia from the global financial crisis.

"Land information ... is not only key to the property market and land development, but is critical to many public services such as infrastructure engineering, emergency management, or disaster responses," he said.

"Any compromise on the private sector's part will have significant consequences, which could go beyond the properties we own."

The Public Service Association is demanding the government provide a business case or cost benefit analysis.

"The details of the scoping study have not been released on the basis it is a confidential cabinet document," said general secretary Anne Gardiner.

The legislation to allow the sale of the registry was passed after Christian Democratic MLC Reverend Fred Nile finally gave it his vote.

Rev Nile did not return Fairfax Media's calls about the issue.

smh.com.au

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