A security interest may be a mortgage or charge.
A mortgage is typically held over land. The mortgagee (e.g. a bank) will have the power to sell the mortgaged land if the mortgagor (e.g. the landowner) defaults on the mortgage. Mortgages may be registered on the Real Property Act Register, otherwise known as the Land Titles Register.
A charge may only be held against a corporation and is registered on the Corporations Act register administered by the Australian Securities and Investment Commission. This register is commonly known as the ASIC register.
Security interests under the Water Management Act 2000
Under the Water Management Act 2000, security interests may be registered directly against a Water Access Licence (WAL) on the WAL Register administered by NSW Land Registry Services (NSW LRS).
Under the licence conversion provisions of the Water Management Act 2000, a security interest (registered or unregistered) that relates to a 'prior' licence under the Water Act 1912 is taken to be a security interest against the replacement WAL.
For more information about security interests and WALs, refer to the encumbrances section in the Guide to WALs and certificates (PDF, 605.14 KB).
Registering new security interests
Converting existing security interests
A person holding a security interest in relation to a prior licence needs to indicate whether they want that interest registered against the replacement WAL on the WAL Register. This needs to be done in the three-year period. After the three-year period, all unclaimed prior licence interests are extinguished.
WaterNSW will then instruct NSW LRS to allow registration of WAL dealings and the WAL certificate is released. A certificate is needed to buy or sell water (through 'dealings').
Converting security interests if you are a WAL holder
As a holder of a WAL, you may want to buy, sell or change your replacement WAL by a WAL dealing within the three-year period for registering prior licence interests. To do this, you will need to initiate and complete the resolution of the prior licence interests. This means you will need to:
- determine the details of the prior licence interests
- request those interest holders to nominate whether they want the interest registered
- lodge the interest holder responses with WaterNSW.
WaterNSW can then instruct NSW LRS to register the 'claimed' interests and release the WAL for dealings.
You can use the WAL Number Search in the online Security Interest Conversion system to identify prior licence interests in your WAL.
To register a prior licence interest in your WAL:
- read the Guide to secured interest registration by holders of replacement WALs (PDF, 657.51 KB)
- complete the Secured interest registration by holders of replacement WALs application form (PDF, 663.62 KB)
Converting security interests if you are a security interest holder
Prior licence security interests will be registered by WaterNSW on request within three years of the commencement date of the WAL, providing that:
- the security interest holder has notified the WAL holder of their intent to register the interest, and the 90-day notice period has lapsed
- the security interest holder certifies that they have undertaken step 1.
The wording of the notice to the WAL holder must comply with the Mortgagee notice of registration of security interest issue to WAL holders template (DOCX, 20.18 KB).
Note that a security interest holder is exempt from this requirement if the licence holder requests WaterNSW, in writing, to have the security interest registered on your behalf. This will typically happen when the WAL holder wants to undertake a dealing before three years expires and before the prior licence interests are resolved by the interest holders.
Security interest holders can use the WAL Number Search in the online Security Interest Conversion system.
Security interest holders can also apply for access to use the Security Interest Conversion system to search for all replacement WALs in which the user may have a prior licence interest and, once the 90-day notification process is complete, lodge claims online with WaterNSW.
To apply for access, go to the Security Interest Conversion system and complete the online request by email to seek approval for login and password access.
Alternatively, security interest holders can lodge a request to register a prior licence interest by completing the Request to register a security interest in a replacement WAL, or notification that no security interest exists (initiated by security interest holder) form (PDF, 635.35 KB).
Converting security interests relating to 'prior' Water Act 1912 licences
When a water sharing plan commences under the Water Management Act 2000, licences issued under the Water Act 1912 are converted to WALs (and approvals). The conversion is completed with the issue of a WAL certificate. A certificate is needed to buy or sell water through dealings.
The Water Management Act 2000 provides that any security interest on a land attaching to a 'prior' licence under the Water Act 1912 continues as an equivalent interest in the replacement WAL. The party holding that interest needs to indicate whether they wish to register it on the WAL register against the replacement WAL. They will generally have three years from the commencement of the replacement WAL to lodge their claim. Any interests which have not been claimed within that time period are extinguished.
Once all prior interests are resolved (registered or repudiated) the certificate is issued. In the case of a licence with a security interest, the certificate is typically issued to the holder of a security interest.