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What is a Priority Notice?

Priority Notices are a simple way of temporarily preventing new legal interests in land being registered, prior to the registration of the dealings set out in the Priority Notice. They are designed to remove the risk of registration between settlement of a transaction and registration, and also to reserve a title for an impending settlement. A Priority Notice puts interested parties on notice that the lodgement of a dealing on the title is imminent.

Duration of Priority Notices A Priority Notice is effective for 60 days. This period can be extended (once only) for an additional 30 days if the application for extension is made while the Priority Notice is in force. The Priority Notice will be removed from title after it expires and will have no further effect.  Any subsequent Priority Notice lodged by the same party will have effect only from its lodgement date and will not be connected in any way to former Priority Notices.

Can a dealing still be registered if a Priority Notice has been lodged? A dealing or any plan giving effect to an entitlement or interest in the land must not be registered by the Registrar General while a Priority Notice has effect, without the consent of the person who lodged the Priority Notice. A document can still be lodged for registration, but it will sit as unregistered until such a time as the Priority Notice expires or otherwise lapses. Registration of certain dealings are not prevented by a Priority Notice and these are set out in S74W of the Real Property Act 1900. http://classic.austlii.edu.au/au/legis/nsw/consol_act/rpa1900178/s74w.html

Should you lodge a caveat or a Priority Notice? Unlike a caveat, there are no restrictions on lodging a further Priority Notice when the earlier one lapses, unless the Supreme Court makes an order prohibiting it. Another difference is that a registered owner of the property is not notified of the lodgement of a Priority Notice unlike a caveat. When deciding whether to register a caveat or a Priority Notice you should consider the settlement period, as a Priority Notice will lapse in 90 days as opposed to the caveat which will only lapse in accordance with procedures set out in the RPA. Priority Notices do not replace caveats and cover a narrower field of interests. There is nothing which prevents a purchaser or incoming mortgagee from lodging both a caveat and a Priority Notice.

What happens when two parties lodge a Priority Notice? Where two Priority Notices are recorded by different parties claiming interest in the same land then it is anticipated that priority would be determined by lodgement order of the Priority Notices.

Cancellation of Priority Notices The person who lodged the Priority Notice may withdraw it. A person with an interest in the land in relation to which a Priority Notice is in force may make an application to the Registrar General to have the Priority Notice cancelled. The Registrar General must give the person who lodged the Priority Notice written notice of the application and give them at least 10 days to respond. A person who lodges a Priority Notice without reasonable cause or does not withdraw a Priority Notice without reasonable cause may be liable to pay compensation to any person for any loss attributed to the lodgement or refusal of withdrawal.

Should you lodge a Priority Notice? Although not compulsory, a Priority Notice provides an inexpensive and simple way of preventing new legal interests in the land being registered prior to registration of the relevant dealing on the title for land. From an anti-fraud perspective, Priority Notices will put interested parties on notice of impending transfers enabling fraudulent activity to be prevented more easily.            



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