The land titles registry sell-off could make it more expensive
to put a roof over your head in future.
The NSW government’s plans to privatise the profitable land titles registry have been condemned by lawyers, surveyors and real estate agents at a forum convened by Shadow Minister for Finance, Services and Property Clayton Barr earlier this week (Wednesday).
NSW Premier Gladys Berejiklian is planning to lease the part of the Land and Property Information service (LPI) that deals with defining land boundaries and keeping property records to a private company for 35 years.
But experts say it’s a stupid move that will undermine the integrity of the system, push costs up for house buyers and sellers and decimate the LPI’s skilled workforce.
The Public Service Association website, The Secret Sell-Off, points out that the land titles registry gives people “an iron clad guarantee from the NSW government that your home belongs to you”.
In the US people take out insurance to guard against fraud and mistakes in property title.
Don Grant, who was Surveyor General of NSW from 1986 to 2000, said the LPI underpinned the NSW property system and the integrity of the state’s land titles registry, which gave the public confidence.
John Cunningham from the Real Estate Institute of NSW said the decision did not make financial sense. The land titles registry at the LPI is estimated to net the government around $70 million a year.
“You can understand it in terms of the reality of economic management and business that are not performing but the LPI is one of the best performing businesses in NSW,” Mr Cunningham said.
“It’s a very effective and safe system and has worked brilliantly for many years. It’s an innovative government department on the cusp of great things.”
He believed the public wanted to know the registry was safe in government hands, not private.
A recent survey by the Institution of Surveyors NSW found that 70 per cent of people were unaware of the proposed sell-off.
“I’m perplexed. The government talks about open and free data but they want to sell it off, which means it’s going to cost more,” he said.
President of the Institution of Surveyors NSW, Michael Green, said there was a lack of transparency from the government about the sell-off: “it’s like a veil has been drawn”.
The government appears to have gone to great lengths to downplay the sale and dismiss it as merely administrative to slide the lease through.
“They don’t want to tell the public that they’re selling what is a good public service but which will become a private monopoly,” Mr Green said.
He said similar moves in Canada, which were currently being resisted by some provinces or territories, had led to a quadrupling in fees for home buyers and sellers.
The UK recently abandoned plans to privatise its land registry, citing concerns about rising costs to consumers and allowing a private entity to run a monopoly.
Mr Green said the impact would also be huge for the 400 LPI staff. Although full-time workers’ jobs were guaranteed for four years those on contracts could be let go early. Also, full-time staff were likely to look around for other jobs.
Privatisation would mean new staff would be less likely to be trained up and the loss of corporate memory from people leaving would also be damaging.
“People will disappear slowly but surely in the next four years.”
It was also a risk that the service would be returned in worse shape once it was handed back to the NSW government after 35 years, “You’ve got a winner. What are you going to get back?”
The other four sections of the LPI are understood not to make a profit.
Former Law Society NSW President Margaret Hole said the land titles section was funding the other four-fifths of the department and selling it would harm the registry’s impartiality, whether real or perceived.
There are fears that privatising the service could lead to a dip in quality of service, especially where a private company would be more concerned with profit and shareholder dividends.
“Once it happens, a private body would have no control over the behaviour of a private company,” Ms Hole said.
President of the Law Society of NSW, Pauline Wright said the yield of $1.5 billion from offloading the land titles registry seemed large but it was a ‘negligible’ return from an asset that consistently delivered profit.
“It’s already among of the world’s best land registries and [there are] few benefits to be gained from privatising it,” Ms Wright said.
Ms Wright said the privatisation would not create the capital investment the government was forecasting because there was little incentive for a private company running a monopoly to invest.
“It’s a fundamental duty of the government to manage and protect the security of its land titles in the state,” Ms Wright said.
“You could say [it’s] the asset that underpins the whole of the NSW economy is under threat.”
Mr Barr called for an inquiry to force the NSW government to be open about the tender process and produce the documents that went with it.
You can watch the forum here on Facebook.