# Who has paid off their mortgage?



## ROE (16 August 2011)

is there anyone here have paid off their mortgage and what happen to the title
and what is the normal proceeding? 

I been leaving my loan account open for a while with little debt left on it
is there any advantages and disadvantages closing it?

I like the feeling of closing up stuff I no longer use
and consolidate into fewer accounts


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## tech/a (16 August 2011)

You get the title.
Then if you want to raise capital against it then it will go to the lending institution.

One thing I did as quickly as I could is get out of cross collateralization.
I had each property stand on its own two feet so that when I freehold I can do so without being concerned about gearing of the portfolio.

I have lines of credit open on all properties including home.
I rarely use the home for funds.
This sort of flexability means I can buy at Auction or make rediculous offers at anytime knowing what my capital availability is at any one time.

If ofcourse your not developing or buying larger items then just close out the account and throw a party everytime there is an interest rate rise.


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## pixel (16 August 2011)

ROE said:


> is there anyone here have paid off their mortgage and what happen to the title
> and what is the normal proceeding?
> 
> I been leaving my loan account open for a while with little debt left on it
> ...



 It's a long time since I had a mortgage. In the early 1980's it was, and I only took it because it was subsidised by the company I worked for. I got higher interest on the money market than I had to pay for the mortgage.

When I changed employers, I wrote a cheque for the total amount owed and received the papers in return.

As I said, that was 25 years ago, so things may have become a tad more complicated since then; but the same principles should still apply.

As to closing out anything no longer required - especially if it's to do with debt and charges - I agree 100% that it's the smart thing to do. The Bank won't treat you any better if you hold on to an old account. They don't even give a toss, for how long you've been their customer - be it 30 years, 30 months, or 3 weeks.


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## nomore4s (16 August 2011)

What are you mob doing?

Don't you know its better to rent:

Good work Roe, probably best to just pay it out and not have to worry about it anymore, wouldn't be to difficult to open a line of credit against the property if required later on.


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## tech/a (16 August 2011)

> They don't even give a toss, for how long you've been their customer - be it 30 years, 30 months, or 3 weeks.




How true that is!

I remember back in the 80s myself when the NAB was throwing money at me ---I of course took it----then things got hard---so hard that this young snapper couldn't fund the interest bill---so all of a sudden I was treated as a leper.

Terribly concerned--and I had good cause--my solicitor calmed me down.

Ill never forget his words.
"If you owe banks enough to hurt their books then --*THEY* have the problem of your debt---not you."

Fortunately they talked and negotiation saved bankruptcy.
But had it been a single mortgage Im sure I would have been toast.

*Never forget*


> They don't even give a toss, for how long you've been their customer - be it 30 years, 30 months, or 3 weeks.


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## McLovin (16 August 2011)

tech/a said:


> Ill never forget his words.
> "If you owe banks enough to hurt their books then --*THEY* have the problem of your debt---not you."




My grandfather used to always tell me, "if you owe the bank a million it's your problem, if you owe the bank a hundred million it's their's".


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## Bill M (16 August 2011)

ROE said:


> is there anyone here have paid off their mortgage and what happen to the title
> and what is the normal proceeding?




I got all the mortgage discharge papers and went down to the Land and Titles office in downtown Sydney and got a print out of my title showing mine and my wifes name on it. It was a very good feeling.



> I been leaving my loan account open for a while with little debt left on it
> is there any advantages and disadvantages closing it?
> 
> I like the feeling of closing up stuff I no longer use
> and consolidate into fewer accounts




I didn't see any benefit in leaving the account open, I just wanted to be rid of the mortgage. Apart from the competitive online accounts I've closed up all of the accounts I don't use anymore, cheers.


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## ROE (16 August 2011)

cool, look like getting rid of it is the way to go..

Thank you all 

another quick one what about, for some crazy reason after I got hold of the title and some years down the track I misplace it? 

is there any record some where that prove I own the place?
and can another copy be obtained?


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## Happy (16 August 2011)

If you care to do the maths in Australia it doesn’t pay to keep loan open for any longer that can be paid off.

Interest on loan is higher than interest on savings, not to mention that if you earn above threshold you have to pay tax on earned interest (but not on saved one).

However, recently I heard (Jenman on TV) if you have no mortgage on property or no property tittle insurance, it is easy to steal it from you while you are overseas or simply not at home.

Supposedly it will be worked on and loophole be closed, but for the time being it is the case.


EDIT:



> …
> is there any record some where that prove I own the place?
> and can another copy be obtained?





And this is the problem that title can be re-issued and not necessarily identity of person asking for copy is checked.

Again not checked during sale of property.


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## skc (16 August 2011)

Surely we've moved past the age where the physical piece of paper called the title deed is the only proof whether you own the property or not.

I must say I had no idea where the title deeds were for my home and investment property until last year when I applied for a LOC on them. It turned out they were held by the solicitor who executed the purchase some years ago...


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## bellenuit (16 August 2011)

ROE said:


> I been leaving my loan account open for a while with little debt left on it
> is there any advantages and disadvantages closing it?




If you have a redraw facility on it and know you will have a need to take out a loan in the future, perhaps pay down to $100 and leave it open. You can then access funds through your redraw facility without having to open a new loan with all the opening expenses. You will presumably have a better rate than alternative loans.

If you currently have other more expensive loans open, then you could possibly use the redraw facility to pay those off and have the benefit of a lower interest rate.

For a long time I used my home loan to purchase shares and just ensured that I kept good records to show what portion of the loan balance applied to the shares (interest on which is tax deductible) and what applied to the home loan (interest on which is not tax deductible, unless for an investment property). As I still had a fair bit to pay off on my home loan when I began purchasing shares, it did take some administrative effort to differentiate between both amounts, particularly when it came to allocating repayments, but a well designed spreadsheet should make it a lot easier. If you only have a tiny amount to pay off, you could make administration easier by paying off the home loan balance in its entirety and then borrowing for share purchases. That means subsequent bank statements will show tax deductible interest without you having to split manually. This could be a more effective way to buy shares on credit than taking out a margin loan. The interest rate should be a lot cheaper and no risk of margin calls. 

I know that the ATO have put some legislation in place to stop people abusing split loan structures but from my knowledge that was to stop people capitalising what should have been non-tax deductible interest on to the tax deductible balance.


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## ROE (16 August 2011)

bellenuit said:


> If you have a redraw facility on it and know you will have a need to take out a loan in the future, perhaps pay down to $100 and leave it open. You can then access funds through your redraw facility without having to open a new loan with all the opening expenses. You will presumably have a better rate than alternative loans.
> 
> If you currently have other more expensive loans open, then you could possibly use the redraw facility to pay those off and have the benefit of a lower interest rate.
> 
> ...




I'm unlikely to do that, I like debt free


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## Smurf1976 (16 August 2011)

A question regarding the Title, as in the physical piece of paper.

Am I correct in my thinking that these days the physical piece of paper is easily replaceable and thus not important to store safely, or indeed to keep it at all? Surely there's other records showing that I own the property? 

Or should I be storing it in a vault somewhere?


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## pixel (16 August 2011)

ROE said:


> I'm unlikely to do that, I like debt free



 +1 to that
I could've had a very quick divorce, when I suggested we should take out a mortgage on the last home we bought, to buy shares. SWMBO, who had so diligently done the sums, even sold "her" WAN shares to get us into the new home without any mortgage, nearly burst a blood vessel when I suggested I'd like to buy a few thousand ANZ shares. 
OK, they were $2.95 at the time - would've worked out alright, but who'd know in 1993?
No - much better off without debt and safe in the knowledge we own what we have.


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## pixel (16 August 2011)

Smurf1976 said:


> A question regarding the Title, as in the physical piece of paper.
> 
> Am I correct in my thinking that these days the physical piece of paper is easily replaceable and thus not important to store safely, or indeed to keep it at all? Surely there's other records showing that I own the property?
> 
> Or should I be storing it in a vault somewhere?



 As long as you can prove that you are indeed you, it should be possible to obtain a replacement copy. After all, that's what those Nigerians did, who stole some WA home owners' identity while the true owners were on extended Overseas vacation. Then they sold the property "as is" and had the money squirreled away by the time the surprised former owners came back to a no-more-Home.

It does cost however; so it's much better to take the paperwork and store it somewhere safe. It needn't be a bank vault, although if your property oozes wealth and abundance, some burglar might drop in and use the deed as wrapping for the jewelry or coin collection.


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## starwars_guy456 (16 August 2011)

pixel said:


> As long as you can prove that you are indeed you, it should be possible to obtain a replacement copy. After all, that's what those Nigerians did, who stole some WA home owners' identity while the true owners were on extended Overseas vacation. Then they sold the property "as is" and had the money squirreled away by the time the surprised former owners came back to a no-more-Home.
> 
> It does cost however; so it's much better to take the paperwork and store it somewhere safe. It needn't be a bank vault, although if your property oozes wealth and abundance, some burglar might drop in and use the deed as wrapping for the jewelry or coin collection.




Yeah, we've changed our system to one such that "registration cures all defects". So that's why once you settle on a property, the bank will seek to register the transfer promptly (so they can put themselves down in the encumberances section) so nobody else can exclude the rights of the bank.

http://en.wikipedia.org/wiki/Torrens_title

Saying that though, I believe there is an insurance system to compensate people who are the victims of fraud under the Torrens system. They'll get a monetary sum, but will not be able to resume their old property.


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## Tyler Durden (16 August 2011)

pixel said:


> They don't even give a toss, for how long you've been their customer - be it 30 years, 30 months, or 3 weeks.




Great quote. Definitely something that needs to be kept in mind.

I remember a few years ago, I was a junior doing conveyancing. My firm didn't specialise in conveyancing, I had little experience, my boss didn't teach us anything at all, and I had been sent from the suburbs to the city for a settlement.

When it came time to exchange documents, there was a $5 fee I didn't know about. It was something you'd know about only if you'd done a settlement at this particular place before. 

All the cheques I had added up to the exact amount with the exception of this fee, so I was $5 short. My boss had this bad habit of paying us monthly, at the beginning of the next month, and since it was at the end of the month, I had no money in my bank account (or wallet).

I thought I could go into my bank (CBA) and ask for a $5 overdraft. I'd never done it before, but I had heard of the term so thought it was possible. I will never, ever, ever forget the look on the teller's face as I asked for $5. She went from a smiling, warm, welcoming teller to one looking at me with disdain and dirt, like I was a homeless bugger asking for spare change. I said "I've been with your bank for 15 years and I can't even get a $5 overdraft?"

I walked out of there with such cynicism that it became a life changing moment. It was the moment where the line "people only recognise money" came true.

Luckily, one of my very good clients was in town and I asked her for $5, although she thought I was just asking for an 'under the table' commission. I ran back to the settlement and got the job done, thereby avoiding extra costs for my client.


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## Julia (16 August 2011)

I can't comment about other States, but this is how it goes in Queensland:



> Certificate of title
> 
> Under Queensland law, the true record of current title to property is held in an electronic system maintained by the Registrar of Titles in the Department of Environment and Resource Management’s Titles Registry. This is far more secure than maintaining paper titles. The department gives the security of electronic data the highest priority, and has appropriate back-up and other security measures in place for information in the Titles Registry’s Automated Titles System.
> 
> ...




Hard to imagine in these times of everything being done electronically, the piece of paper would still be required.

Enjoy having that mortgage paid off, ROE.  There's no better sense of satisfaction imo than that first fully paid for property.


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## ROE (16 August 2011)

Julia said:


> I can't comment about other States, but this is how it goes in Queensland:
> 
> 
> 
> ...




Thanks, I prefer a system where the electronic is a true copy and you have a paper copy as a backup.

Funny how you go to the bank and draw out $1000  and they ask you for all sort of legal documents to prove who you are and a property worth hundred of thousand of dollar and people can go around and get away without proving who they are.

sound like our financial system where people can easily setup shop give questionable advices and stole million of investors money and you get done for giving simple advice on the forum and money never change hand


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## sptrawler (16 August 2011)

Smurf1976 said:


> A question regarding the Title, as in the physical piece of paper.
> 
> Am I correct in my thinking that these days the physical piece of paper is easily replaceable and thus not important to store safely, or indeed to keep it at all? Surely there's other records showing that I own the property?
> 
> Or should I be storing it in a vault somewhere?




Check with your Lands Dept, but over here in W.A it is a pain in the ar$e and costs money.


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## tech/a (17 August 2011)

I lost a title once.
My conveyencer arranged another original
cost $500


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## Sir Burr (21 August 2011)

Bill M said:


> I got all the mortgage discharge papers and went down to the Land and Titles office in downtown Sydney and got a print out of my title showing mine and my wifes name on it. It was a very good feeling.




Is that all a solicitor would do (get a print out)? Is there really any need for one to discharge a mortgage?


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## Lantern (22 August 2011)

Not quite yet, but seriously looking forward to paying it off. 6-8 months to go
It's under 20K now.


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## awg (22 August 2011)

Hi ROE,

I have a line of credit on my house, that was setup years ago.

I can use it for any purpose and it is the cheapest form of debt available.

Having paid it down to the minimum $500, I see few reasons to close it, even thought the bank want me to, as there is no annual charge, so costs no more than basic Mastercard, with $500 @ 7% ( if you go below it will close)

If for any reason you wish to utilise an amount of cash that is not readily spare, but you know you can payback fairly quick, like a reno, big purchase, or emergency, they are very convenient.

If you close it and EVER want another facility, they charge a bucket of fees to set one up.

(This does means the bank retains the mortgage papers for my own home.)

In the instance of another property, I have the Original Land Titles document, after paying off the mortgage. Mine is on embossed style paper

With regards to Original Land Title Certificate, it is possible to obtain an urgent replacement if you lose one, as I personally travelled to Sydney and walked out with mine the same day, much to the astonishment of my solicitor, after having misplaced one, and needing it to finalise a sale.

I dont know if you could still do that. 

I suspect banks and solicitors will need to tighten procedures, they might have

As someone else pointed out, they can be used for share trading, with careful record keeping, and are much cheaper than a margin loan.

All depends on your expenditure/cashflow/investment patterns at a given time in life

I would add that your Land Title Certs are critical documents, and you should know where they are, have their locations recorded for your estate, and most especially take care that you are not in a position to have them missappropriated.

Having said all that, simplicity sounds nice, just I got so many account doodas, one less wont do it


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## tech/a (22 August 2011)

Great points AWG.

I do exactly the same.
For very similar reasoning.

No need to be afraid of debt after all if its costing you 7%
and you can returne greater---there is no problem.


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## Bill M (22 August 2011)

Sir Burr said:


> Is that all a solicitor would do (get a print out)? Is there really any need for one to discharge a mortgage?




At the time I just wanted to make sure no bank had their name on my title so that's why I made the effort to get it. Just wanted the title in my hands with our names on it.

The title for the property I live in now is held in safe storage at my Solicitors. Is there any disadvantage of them looking after it for me, anyone?


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## tech/a (22 August 2011)

Bill M said:


> At the time I just wanted to make sure no bank had their name on my title so that's why I made the effort to get it. Just wanted the title in my hands with our names on it.
> 
> The title for the property I live in now is held in safe storage at my Solicitors. Is there any disadvantage of them looking after it for me, anyone?




I query this incident (Where a Perth property was sold when the owners were away).
If its that easy then you could probably have your house sold under you while your in it with your title at your solicitors.

It appears that the con was more about having authority to act for the owner than the title.
The title would show the home owner.
Someone would have to sign the contracts.
And have the funds sent to an account.

Just beggars belief!


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## Bill M (22 August 2011)

Thanks tech, I think I better go pick it up to be on the safe side, cheers.


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## cynic (25 August 2011)

After using my last mortgage as an inexpensive line of credit for approximately one decade, I decided to redeem the title as there is now little likelihood of me needing access to the equity. It was an empowering feeling, holding that final title in my hands and knowing that the bank no longer has any hold over my real estate assets. 

The question of security of real estate is a valid one as I can readily attest. I have been the subject of at least two attempts at identity theft (including the attempted sale of one of my investment properties in 2005). Fortunately, both attempts failed, however, the incident concerning my IP was very nearly successful (one of the relevant State Government departments even produced a report stating that the property had actually been sold!!!)

Upon discovering how close I had come to having a house stolen without my knowledge, I made numerous enquiries of relevant Government authorities. The results of my enquiries did precious little to allay my fears with regard to the vulnerability of my real estate holdings.

A couple of years later, I was further alarmed by the ease with which I was able to subsequently sell my IP despite not having any photographic identification, whatsoever. Throughout the process of listing, sale and settlement, no effort was taken by any mortgagees, estate agents or conveyancers to confirm my identity as the owner of the property! I could have been anyone!!!

I am very happy that the titles are out of the hands of the banks, as I have reservations about the integrity of the financial industry, particularly with regard to the custody and management of assets and personal information.


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## tech/a (25 August 2011)

Thinking out of the swuare

Why couldn't you place a caveat On your property once freeholded ( in fact you could do it to any value up to the mortgaged amount)

Caveats have to be discharged upon sale.
Scammers would leave these alone.
Your then supplying your own protection mechanism.


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## starwars_guy456 (25 August 2011)

tech/a said:


> Thinking out of the swuare
> 
> Why couldn't you place a caveat On your property once freeholded ( in fact you could do it to any value up to the mortgaged amount)
> 
> ...




I'm pretty sure that caveats only last for 90 days or so per application, so perhaps not practical as a protection measure.


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## tech/a (25 August 2011)

starwars_guy456 said:


> I'm pretty sure that caveats only last for 90 days or so per application, so perhaps not practical as a protection measure.




Not sure
But I know I was snaffled when bankrupting a debtor.
I won the bankruptcy and wound her up only to have mother with a caveat reviewers on the mortgage to the value of the difference of mortgage to sale price.
Effectively blocking funds.

Any solicitors out there.?


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## awg (25 August 2011)

having the line of credit meant handing back my title deeds, so it wasnt something I did lightly 

however keeping it open at the minimum balance, means that not only do I have free secure document storage, (saves me losing it like I did with another one) but also some protection against fraudulent sale.

I actually had a solicitor underpay me by about $10k upon settlement of several property transactions, it was hard to notice, as they was seperate amounts, and when I went back and told them, they said they would have eventually reconcilled it from their trust fund 

got to keep your eyes open


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## Sir Burr (25 August 2011)

awg said:


> however keeping it open at the minimum balance, means that not only do I have free secure document storage, (saves me losing it like I did with another one) but also some protection against fraudulent sale.






cynic said:


> I am very happy that the titles are out of the hands of the banks, as I have reservations about the integrity of the financial industry, particularly with regard to the custody and management of assets and personal information.




Now I'm confused!
...and scary about these "fraudulent sales".

I've been thinking to close our mortgage account for ages (3 years) and has cost us nothing to keep it open with zero balance over that time. Decided to close it this past week and too late to change now.

The reason why is because the interest rate is well above 9%, don't need money that expensive! Was cheap when we did have a balance but since then has gone up in comparison to others. Also, the mortgage manager recently advised Pepper Australia PTY LTD is taking over from the previous non-bank lender.

Just seems like a good time to get rid of it.

Have got a solicitor to do it for us but thinking to keep the papers ourselves rather that letting this solicitor keep them. Free for him to store them but from experience can cost when you want them back.

Might dig a hole in the backyard


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## Sir Burr (13 October 2011)

Sir Burr said:


> ...got a solicitor to do it




Just about done, waiting for the piece of paper - Certificate of Title.

~$1400 later.

Includes $500 for the bank + $330 for their solicitor + $330 for my solicitor + some search and  LPI lodgment fee.


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## trainspotter (13 October 2011)

tech/a said:


> Not sure
> But I know I was snaffled when bankrupting a debtor.
> I won the bankruptcy and wound her up only to have mother with a caveat reviewers on the mortgage to the value of the difference of mortgage to sale price.
> Effectively blocking funds.
> ...




Unless the mother has a valid reason for the caveat it can easily be removed. About $1200 for a decent solicitor to lift it.


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## trainspotter (13 October 2011)

tech/a said:


> Thinking out of the swuare
> 
> Why couldn't you place a caveat On your property once freeholded ( in fact you could do it to any value up to the mortgaged amount)
> 
> ...




It depends on which State you are in as to the validity of the caveat. In Western Australia it is allowable.

The Registered Proprietor of land may lodge a Caveat against land registered in his or her own name. Such Caveats are usually lodged in the following circumstances:

• the Caveator/Registered Proprietor has lost possession of the duplicate Certificate of Title either by fraud, theft or misplacement;
• the Caveator/Registered Proprietor has revoked a Power of Attorney but has been unable to contact the attorney to give advice of the revocation;
• the Caveator has lost possession of a signed instrument (eg Transfer of Land) and has not been paid.

The evidence to support such a Caveat would be a Statutory Declaration by the Caveator setting out the facts and repeating the claim of the Caveator. A Caveat lodged by a Registered Proprietor against his or her land would be accepted by the Registrar.


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## ROE (14 October 2011)

trainspotter said:


> It depends on which State you are in as to the validity of the caveat. In Western Australia it is allowable.
> 
> The Registered Proprietor of land may lodge a Caveat against land registered in his or her own name. Such Caveats are usually lodged in the following circumstances:
> 
> ...




This look like a good idea, I just Google search and found I can do it here too


I/We forbid the registration of any instrument affecting the land as required in item 5 unless this caveat: 
  Is withdrawn by me/us or by order of the court; or 
  Lapses fully or partially in order to allow registration of an instrument.  REFER WARNING OVERLEAF


5. ACTION REQUIRED BY THIS CAVEAT (Tick appropriate box or boxes)
(a) Prevention of all instruments with the land (refer to statutory exceptions overleaf).  

(b) Prevention of all instruments with the land other than those dealings as identified at S104(5) Land Titles Act 1925

(c) Prevention of instruments as follows (refer overleaf)


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