Australia: Pri­or­i­ty notices: Pru­dent or impractical?

With the dead­line for manda­to­ry e-con­veyanc­ing fast approach­ing, con­veyanc­ing in New South Wales has unequiv­o­cal­ly entered the dig­i­tal age.

And while the change from ?'paper' con­veyanc­ing to online plat­forms gives prac­ti­tion­ers the oppor­tu­ni­ty to stream­line their ser­vices and poten­tial­ly pass on costs sav­ings to clients, it also cre­ates new poten­tial prob­lems – one of the most pro­nounced of which is fraud.

It is thought that pri­or­i­ty notices will be a use­ful tool in the respon­si­ble e-conveyancer's armoury – if gen­uine land trans­ac­tions are flagged by a pri­or­i­ty notice, it is hoped that iden­ti­fi­ca­tion of poten­tial­ly fraud­u­lent trans­ac­tions will be quick­er and easier.

But the actu­al legal and prac­ti­cal effects of pri­or­i­ty notices have left many scratch­ing their heads. What are they? And how and why should they be used?

This arti­cle aims to answer some of the most com­mon ques­tions about pri­or­i­ty notices.

What is a pri­or­i­ty notice?

Pri­or­i­ty notices were intro­duced in Novem­ber 2016 under the Real Prop­er­ty Amend­ment (Elec­tron­ic Con­veyanc­ing) Act 2015.

A pri­or­i­ty notice is a form of land deal­ing which, once reg­is­tered on title:

  • acts as a notice to the pub­lic that some­one intends to lodge a deal­ing on a rel­e­vant title (for exam­ple, a trans­fer, lease or mort­gage); and
  • tem­porar­i­ly (ie for the dura­tion of the pri­or­i­ty notice) pre­vents the reg­is­tra­tion of oth­er deal­ings in order to pre­serve the pri­or­i­ty-on-title of the deal­ing cov­ered by the pri­or­i­ty notice. Any sub­se­quent deal­ings are not­ed on title as 'unreg­is­tered deal­ings' until the pri­or­i­ty notice is with­drawn or lapses.

Thus, for exam­ple, if you are intend­ing to lodge a trans­fer or mort­gage, you can reg­is­ter a pri­or­i­ty notice to hold the transferee's or mortgagee's place on title up until settlement.

It has been sug­gest­ed that the pri­or­i­ty notice replaces what used to be known in New South Wales as a 'set­tle­ment notice'. How­ev­er, we con­sid­er the pri­or­i­ty notice to be more com­pa­ra­ble to a caveat.

Lodge­ment, dura­tion and cost

Pri­or­i­ty notices must be lodged online via PEXA, but they can apply to any trans­ac­tion—paper or electronic.

A pri­or­i­ty notice has an ini­tial pri­or­i­ty peri­od of 60 days from the date of reg­is­tra­tion and can be extend­ed once, for a fur­ther 30-day peri­od. How­ev­er, a pri­or­i­ty notice can also be with­drawn before the end of the 60-day (or extend­ed 30-day) period.

Pri­or­i­ty notices are cheap to reg­is­ter (approx. $48 for sin­gle or mul­ti­ple titles) and to extend (approx. $21). The fee for with­draw­ing a pri­or­i­ty notice is approx­i­mate­ly $25.

Pros and cons

Pri­or­i­ty notices have some dis­tinct advan­tages and disadvantages.

In their favour:

  • they are cheap
  • they are quick and easy to lodge
  • a caveat­able inter­est is not need­ed in order to reg­is­ter a pri­or­i­ty notice – all that is required is that you are a par­ty to a land dealing
  • a sin­gle pri­or­i­ty notice can remain on title for a rea­son­able time (60 to 90 days), and
  • sequen­tial pri­or­i­ty notices can be lodged with­out lim­it in rela­tion to the same land deal­ing (ie when a pre­vi­ous pri­or­i­ty notice lapses).

On the oth­er hand:

  • unlike a caveat, a pri­or­i­ty notice is time lim­it­ed and does lapse, and
  • pri­or­i­ty notices do not pre­vent reg­is­tra­tion of all sub­se­quent deal­ings – for exam­ple, a caveat is not sub­ject to a pri­or­i­ty notice and there can also be com­pet­ing pri­or­i­ty notices.

Pri­or­i­ty notices vs caveats

We con­sid­er the auto­mat­ic laps­ing attribute to be one of the main pit­falls of a pri­or­i­ty notice. As stat­ed above, when a pri­or­i­ty notice is reg­is­tered, sub­se­quent deal­ings lodged for reg­is­tra­tion are not­ed on title as 'unreg­is­tered deal­ings' until the pri­or­i­ty notice deal­ing is reg­is­tered or the pri­or­i­ty notice lapses or is with­drawn. The abil­i­ty to lodge con­sec­u­tive pri­or­i­ty notices for the same deal­ing (if the deal­ing is not reg­is­tered with­in the ini­tial pri­or­i­ty peri­od), does not appear to pre­vent an unreg­is­tered deal­ing not­ed on title (if in reg­is­tra­ble form) from reg­is­ter­ing imme­di­ate­ly on the lapse of the pri­or­i­ty notice and before a sec­ond pri­or­i­ty notice can be lodged. This is clear­ly unsat­is­fac­to­ry if the deal­ing for which you are try­ing to pre­serve pri­or­i­ty can­not be reg­is­tered with­in the pri­or­i­ty notice peri­od for what­ev­er reason.

So, while many have pon­dered whether caveats will lose their rel­e­vance with the intro­duc­tion of the pri­or­i­ty notice, we believe that, if a there is a caveat­able inter­est, it may well be more pru­dent to lodge a caveat than a pri­or­i­ty notice – par­tic­u­lar­ly, if the reg­is­tra­tion date of the deal­ing can­not be pre­dict­ed with certainty.

The beau­ty of a caveat is that it remains on title indef­i­nite­ly, pre­vent­ing vir­tu­al­ly all deal­ing with the title until it is either with­drawn (for exam­ple, when pay­ment is made to the caveator) or is lapsed by the own­er or anoth­er inter­est­ed per­son seek­ing its removal. Giv­en that achiev­ing laps­ing can be com­plex (and even involve court pro­ceed­ings if the caveator defends their caveat­able inter­est), a caveat gives strong pro­tec­tion for the pri­or­i­ty of a pro­posed dealing.

Even though the pri­or­i­ty notice and caveat have dis­tinct pur­pos­es—the pri­or­i­ty notice mere­ly to pre­serve the pri­or­i­ty of a spe­cif­ic deal­ing that is to be lodged for reg­is­tra­tion at a lat­er time and the caveat to act as a form of secu­ri­ty and a warn­ing to third par­ties that the caveator has an equi­table or legal inter­est in the land – where a caveat­able inter­est exists, either can be used to pro­tect the pri­or­i­ty of an impend­ing deal­ing. In our view, where that caveat­able inter­est exists, reg­is­ter­ing a caveat is the safer bet (albeit that it costs $100 more).


Although pri­or­i­ty notices are, unde­ni­ably, a quick and cheap tool that can be used to pre­serve a future dealing's pri­or­i­ty on title, one must also care­ful­ly con­sid­er whether:

  • the rel­e­vant deal­ing will, in fact, be reg­is­tered with­in the pri­or­i­ty notice peri­od, and
  • if the cir­cum­stances per­mit, whether a caveat should be lodged instead.

Per­haps these draw­backs explain why their uptake in New South Wales has been slow.

For further information please contact:

Daniel Kentwell, Senior Associate
Phone: +61 2 9233 5544

Carly Howard, Solicitor

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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