Priority notices were introduced as part of the electronic conveyancing process in 2016.
What are priority notices? Priority notices are forms of land dealings that are registered on title and temporarily act as a caveat would: they put third parties on notice that the priority notice holder intends to lodge a dealing on the title at a later time (such as a transfer, lease or mortgage).
What are the advantages to lodging a priority notice in over a caveat?
- Priority notices are relatively cheap at $48.00 for each title compared to a caveat at $141 for each title;
- There is no need to establish a caveatable interest in the property. Provided you are a party to an intended dealing, you have standing to lodge a priority notice; and
- Priority notices are easily lodged on-line via PEXA.
Any other dealings lodged after the priority notice will remain in a ‘queue’ of unregistered dealings until the dealing linked to the priority notice is registered.
What are the pitfalls? The main disadvantage to priority notices is that they will automatically lapse on the expiration of 60 days from the date of lodgement whereas in NSW caveats are indefinite, subject to any application by the registered proprietor to serve a lapsing notice on the caveator.
The 60 days period may be extended only once by a further period of 30 days. However, the extension does not prevent unregistered dealings lodged during the initial 60 days priority notice validity period, from registering after the expiration of the 60 days.
A priority notice simply preserves the priority of a dealing to be lodged later in time. It doesn’t necessarily prevent the registration of all subsequent dealings. For instance, a caveat is not subject to a priority notice. Further, there can be competing priority notices lodged on title.
While priority notices are cheap and easy to register, consideration must be given to whether the specific dealing will be lodged within the 60 days validity period and if a caveat is more appropriate in the circumstances.
If you would like to learn more about priority notices and conveyancing please get in touch with us today.