Sale of NSW Land Titles Registry

Members of the legal and surveying industries in NSW are waiting with some concern to see how the decision to sell the NSW Land Titles Registry will progress. They are joined by those from many other industries- including real estate agents, historians and property developers- in their fears of where this will lead.

The NSW Premier Gladys Berejiklian and Treasurer Dominic Perrottet are known to be firmly in favour of privatising government assets. In this case, the sale of the Registry is earmarked for the funding of an upgrade to the ANZ stadium and a new 30,000 seat stadium in Parramatta and new swimming centre to replace the existing facilities consumed by the aforementioned stadium.

Fairfax Media have been particularly active in publicising what they know of the decision but have still been blocked from much official detail. Esther Han is the Sydney Morning Herald editor for consumer affairs and is tenaciously pursuing detailed official information. To date, she claims that It is hard to find anyone outside the government who thinks it’s a good idea!

What do we know?

NSW currently has one of the most robust and reliable land title systems in the world.

In July 2016, the NSW government split the Land and Property Information (LPI) department  into separate divisions and announced that the land titles registry would be sold to a private bidder.

In September 2016, legislation was passed to allow the contractual agreements between the government and a private operator, which will include government oversight through the Registrar General.

There are 4 consortiums involved in the final bids which are being placed in March 2017.

A leaked Treasury document reveals NSW’s land titles registry is earning $130 million in profit for the taxpayer each year. Its “essential natural monopoly” says Esther Han, “represents a highly strategic asset for the private sector”.

The sale is essentially a lease for 35 years and is expected to provide the government with approximately $2 billion.

The NSW Government has refused to release scoping documents or consult the community.

The government has already spent $6.5 million  on consultants  ($4.3 million to JP Morgan) in the lead up to their decision.

Other countries where a sale of their land titles registry has happened, such as Canada, have seen large increases in costs of title surveys.

After 2 attempts in 2 years, and much public outcry, the UK government permanently abandoned its plans to sell its registry on November 23^rd 2016.

The surveying industry is already seeing increased costs as a result of the initial splitting of the LPI –such as the recently introduced charges for requisitions and higher lodgement fees for large subdivisions. (The question is whether this might be aimed at visibly increasing areas of profitability prior to sale?)

As a result of the division of the LPI, 70 employees lost their jobs and this has led directly to 200 families buying homes in the path of the future F6 freeway, including one home that will be compulsorily acquired for a tunnel.  309 people were given incorrect information  about the impact of roads on their prospective property purchases.  The loss of experienced personnel at this time prior to the sale of the Registry, can only be seen as fraught with risk

The government rejects that this error was due to outsourcing of LPI services.

What we suspect

• There will be increased privacy risks and ensuing fraud

The prospective purchasers of the registry include banks and investment institutions with ownership not necessarily based in Australia and having possible conflicts of interest. Land and property information is currently protected by authorised public servants, subject to security checks and government audits and investigations. What will be the security guidelines for staff employed by private operators?

In order to obtain a Land Title a large amount of private information must be made available -for example, in the case of death, the death certificate includes parents’ names and place of abode, marriage details and children-details which become very useful for fraudulent opportunities. What security will be required for the return or disposal of these once the Title has been issued? The potential blending of this data with land title data  was one of the successful arguments in stopping the UK’s attempts to sell off its Land Registry.

• An Increase in Costs

There will be large increases in insurance costs for Land Surveyors because of the increased risks in creating land titles. These costs will have to pass on to the end consumer.

Banks are watching the progress and will review their practices for mortgages accordingly. They rely on Titles for loan security and are yet to be convinced of the integrity of the lands title system under the management of a private concern. The president of the ISNSW predicts that homeowners will have to pay $900 or more in extra insurance to compensate for the loss of confidence in the government’s guarantee.  This was the case in the United States. Currently a basic starting levy of $5 is the cost of the Torrens Assurance.

• High possibility of a degraded service

Australian Competition and Consumer Commission chairman, Rod Sims, generally has concerns that “Selling public assets has created unregulated monopolies that hurt productivity and damage the economy”.  Ms Berejiklian, however, claims that the government safeguards of minimum service levels, pricing increases restricted to the CPI increase and penalties, as well as step- in and termination rights, will protect the public. She also believes that the Private Sector is best placed to deliver innovations in technology to improve the services of the LPI.

However, Canada’s experience of privatisation of their land registries has resulted in records becoming difficult and expensive to access

What can we do?

The process to date of the privatisation of this valuable asset has simply served to increase public concern .

There has been no independent analysis. There has been no release of scoping studies and no invitation for public comment.

How many members of the public will benefit from improvements to ANZ stadium and a new sporting facility in Parramatta?  How many members of the public will benefit from the long term protection of our Lands Titles System-something that has control of what generally constitutes every family’s largest asset?

Perhaps now is the time to make our local politicians aware of exactly how much we care about protecting one of our state’s greatest assets…