Priority Notices in NSW

A priority notice under the Real Property Act 1900 (NSW) (RPA) is a formal notification lodged with the Registrar-General by an individual intending to register a dealing that affects a legal or equitable estate or interest in land. This notice serves to inform any party searching the land register of the intending dealing, which will take precedence over any other dealings lodged during the notice’s effective period. The priority notice must be submitted in the approved format and manner as specified by the Registrar-General, and it alerts the Registrar-General to the forthcoming dealing.

Advantages of Lodging a Priority Notice

• Protection: While a priority notice is in effect, the Registrar-General is prohibited from registering or recording any dealing, writs, or plans related to the land without the consent of the notice’s lodger.

• Assurance: The Registrar-General may accept the lodgement of a priority notice as sufficient evidence of the lodger’s entitlement to lodge the notice.

Disadvantages of a Priority Notice

• Requirement to Withdraw: A priority notice may be withdrawn by the person who lodged it (i.e. an Australian legal practitioner, or a licensed conveyancer representing that person). The Registrar-General may also remove the notice if it ceases to be effective or is unrelated to the land.

• Liability for Compensation: A person who lodges a priority notice without reasonable cause or fails to withdraw it upon request may be liable to compensate any party suffering financial loss due to the lodgement or failure to withdraw.

• Limited Duration: The priority notice is valid for 60 days from the date of its lodgement, extendable once by an additional 30 days. It ceases to be effective if withdrawn before expiry or if the related dealing is lodged and registered, withdrawn, or rejected. The extension does not prevent unregistered dealings lodged during the initial 60-day period from being registered after the notice expires.

Conclusion

Priority notices under the RPA serve a crucial role in safeguarding the interests of parties involved in property transactions. By providing a mechanism to temporarily secure a priority position on the title register, these notices offer significant protective advantages to lodgers, ensuring that their interests are recognised and preserved during the critical period before the formal registration of their dealing. This assurance is particularly beneficial in preventing subsequent dealings from undermining the lodger's position.

However, the utility of priority notices is not without potential drawbacks. The requirement to withdraw the notice once its purpose is fulfilled, coupled with the limited duration of its effect, necessitates diligent management to prevent any lapse that could lead to liabilities. Therefore, while priority notices are a powerful tool for protecting interests in property transactions, their effective use demands careful attention to procedural requirements and timelines to maximize their benefits and mitigate associated risks.

For assistance with lodging priority notices or advice on whether you should lodge a priority notice to protect your interest, please contact one of our people.

Ron Zucker 0410 590 111

Eollyn Cortes 0478 727 395

Sagang Chung 0431 435 333

Julia Zou 0426 670 202