Process for Registering a Second Mortgage - TAS

TASMANIA

Tasmania still operates on paper certificates of title and is not a subscriber of PEXA. This means only paper
lodgements may be made and, if a paper title exists, the first mortgagee must be contacted to produce it.

Whilst the Conveyancing and Law of Property Act 1884 ('TAS Act') requires the first mortgagee to produce a certificate of title if required by the borrower, it does not prohibit a first mortgagee from treating the registration of the second mortgage as a default if the terms of the first mortgage are such, so the position here is similar to SA.

TAS laws imply some unique considerations for lenders:
As a Second Mortgagee:

• You are at liberty to lodge a second mortgage at any time but can only do so in paper form.
• If a certificate of title is on issue, you will need to contact the first mortgagee to present it.
  Unless you are prepared to risk default on the first security, you should enquire and ensure the first mortgagee actually approves of your second mortgage as production of the title on its own does not mean consent is given.
• You may be required to sign a deed of priority to obtain the consent of the first mortgagee.

As a First Mortgagee:

• You cannot stop the registration of a second mortgage and will need to present the certificate of title if asked.
• However, you should ensure that your mortgage terms stipulate that the borrower cannot grant further encumbrances without your consent, so that you can treat a second mortgage registration as a default if there is sufficient detriment, and in such case you could require a deed of priority as a condition of approving the second mortgage.
  
  
  

Please be advised this is general information only, and is not to be taken as legal advice. If you would like more information, or have a legal query, please contact Abbott & Mourly directly.
Reviewed: 17/01/2024