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Land titles sale could land the public with risk and none of the profit

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The speed with which the Baird government has moved to sell off our world-class land titling service – Land and Property Information – has left many insiders asking some disturbing questions. 

These questions became urgent when it was revealed that recently more than 200 families had unknowingly bought land that could be taken over by new roads in Claremont Meadows in Sydney's west along a new F6 corridor after an administrative error in the office.

That's potentially a very expensive mistake on the part of LPI and it highlights an emergent concern about this sale that could see the NSW community paying through the nose for mistakes made by a private company. A situation where the company takes the profit and the public gets the risk.

Let me explain. The Real Property Act 1900 created a levy to ensure that should the Land Title Office make a mistake there would be sufficient money to cover the costs on behalf of the government or taxpayers.  However, because the LPI is so good and the public servants working there are so scrupulous in their work, there were few claims made against this fund. So the levy was wound down and further claims – should they arise – were to be paid out of consolidated funds. 

But what happens when the LPI has been privatised and there are claims brought against it? Does the taxpayer cover the cost for the corporation that owns the LPI if a successful case is brought by an aggrieved property owner?

The answer to that question is vital because if that is the case, the new owner of the LPI will be able to dip into consolidated funds to cover the cost of its mistake – and it appears there are no protections in place to prevent that outcome. 


The recent error that has resulted in more than 200 properties being bought on land that could be taken over for new roads is a good – or bad – example of the kind of costs the government's consolidated funds could be expected to cover – 200 properties is a lot of money.

Because the LPI is still in public ownership, presumably any liability arising out of this error will be covered by consolidated funds.

As Ben Slade of Maurice Blackburn Lawyers said in relation to this situation: "In these circumstances one would assume the government would act honourably and adequately compensate those impacted. However, if such a sensible solution isn't reached then legal recourse would likely be available to people."

In an attempt to clarify whether there were any safeguards in place to protect consolidated funds, I asked the Treasurer's representative in the Legislative Council, Duncan Gay, a simple question: "Under a privatised LPI, what guarantees do the people of NSW have that compensation claims ... as a result of failures by the private operator, won't be covered by the NSW taxpayer?"

Gay's answer offered no comfort to me or NSW taxpayers.

He said: "The proper checks and balances have been put in place and will continue to operate, which is the way this government looks at a lease or a privatisation in that area. Things for the future need to be protected, but we are concerned about making sure that the appropriate information is available."

I pressed him for an answer: "My question was how the transaction would ensure that claims ... would not be paid by the taxpayer."

He responded by refusing to answer.

This is a serious issue that could have grave financial ramifications for the people of NSW. Expressions of interest in purchasing the LPI closed a few weeks ago.

It is vital that the sale of this world-class asset stops until the people of NSW have the answers and assurances that they won't be left holding the debt for a private corporation.

Justin Field is a member for the Greens in the NSW Legislative Council.