Accounting for risk: The advent of capped conveyancing title insurance

Griggs, Lynden, Low, Rouhshi, & Thomas, Rod (2016) Accounting for risk: The advent of capped conveyancing title insurance. Australian Property Law Journal, 24, pp. 271-382.

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Title insurance companies originating from America, have, in the past 15 years become part of the Australian conveyancing landscape. However for most residential freehold owners, their activities would be a mystery. A purchaser does not routinely obtain title insurance, with the companies presently focussing on servicing the mortgagee sector. While the lack of penetration in the residential purchaser market may be attributed to the consumer’s lack of knowledge, evidence from Ontario and New Zealand illustrates that title insurance is likely to become an additional cost in the conveyancing process in Australia. In this article we highlight the reasons why, and demonstrate how title insurers have, by working with the legal profession been able to subtly move the risk of responsibility for compensation for loss, (at least in the first instance) from the state to the insurer, but with the added benefit for the state and the conveyancing agents that the cost of the insurance is ultimately borne by the consumer. In New Zealand this development is being accelerated by the introduction of capped conveyancing title insurance. Whether title insurance will become part of the conveyancing process is no longer the relevant question for Australia, (it undoubtedly will), but the unknown issue is just how title insurance companies will work with conveyancing agents to infiltrate the market, and what response this infiltration will have in terms of the state’s view as to their continued role in the provision of assurance. We suggest that developments from New Zealand in relation to capped conveyancing insurance are likely to be replicated in Australia in the near future, and that the state’s role in providing an assurance fund will continue, though the state may seek to expand the areas in which the right to compensation is restricted.

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ID Code: 93221
Item Type: Journal Article
Refereed: Yes
Keywords: Electronic conveyancing, Title insurance, Fraud, Risk allocation, Indefeasibility of title
ISSN: 1038-5959
Subjects: Australian and New Zealand Standard Research Classification > LAW AND LEGAL STUDIES (180000) > LAW (180100)
Australian and New Zealand Standard Research Classification > LAW AND LEGAL STUDIES (180000) > LAW (180100) > Property Law (excl. Intellectual Property Law) (180124)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Research Centres > Commercial & Property Law Research Centre
Past > Institutes > Information Security Institute
Current > Schools > School of Accountancy
Copyright Owner: LexisNexis
Deposited On: 07 Mar 2016 05:37
Last Modified: 01 Apr 2017 00:55

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