Priority of Mortgage

Our insured lender advanced funds to a borrower to purchase a property in Western Australia for future development. In accordance with state laws, the borrower paid the stamp duty with a personal cheque to the stamp duty office and the transfer and mortgage were duly stamped and registered. Later, this stamp duty cheque was dishonoured.

Under stamp duty law in Western Australia, the unpaid stamp duty entitles the Commissioner of State Revenue to record a charge on the title to the land, which takes priority over all other mortgages and encumbrances recorded on title.

As a result, the borrower fell into default and the lender took possession of the property. Upon sale of the property, the lender discovered that its mortgage lacked the required first priority and the lender was required to pay the outstanding stamp duty plus interest in order for the charge on the land to be withdrawn.

The Resolution – Stewart Title paid more than $300,000 in unpaid stamp duty and interest, allowing the charge to be withdrawn and the settlement of the sale to proceed.

To make a claim or enquire about a claim related issue, please contact our Claims Department on 1800 300 440 or by fax on 1300 881 432.