The updated Land Transfer Act 2017 (LTA) came into force on 12 November 2018. The LTA consolidates, modernises and replaces the Land Transfer Act 1952, Land Transfer Amendment Act 1963 and Land Transfer (Computer Register and Electronic Lodgement) Amendment Act 2002, and forms the new statutory framework for land the transfer system in New Zealand.
A few of the key changes have been summarised below:
A key change is a change in terminology:
Record of title
This term replaces the old “certificate of title” or “computer register” and is now used for all freehold, leasehold, stratum & other estates.
This replaces the old “registered proprietor” term and is a stylistic change only. It doesn’t alter the rights or legal status of a registered landowner.
Burdened and benefitted land
These terms replace the old “servient tenement” and “dominant tenement”. The benefited land is the land that receives the benefit of the easement and/or covenant and the burdened land is the land over which the easement or covenant is created.
Previously, an easement instrument was used to register land covenants, as well as easements. The LTA now allows a land covenant to be registered on its own and separate from an easement instrument.
Previously, land covenants could only be registered over titles for burdened and benefited land. However, the LTA now allows for covenants “in gross” (that is, a covenant that is in favour of another person, rather than being in favour of land) to be registered on the title in the same way that easements in gross currently are. Covenants in gross are likely to become the preferred choice of registration, rather than encumbrances, to record private contract arrangements in some cases.
It is standard practice for property lawyers to obtain a guaranteed search of a record of title prior to completing a client’s property purchase. A guaranteed search provides extra security for the purchaser under the land transfer system. It allows for the purchaser to be compensated by the Crown if their interest in acquiring the land is defeated due to a competing interest (such as someone illegally registering a transfer of the land to a different owner).
To reflect the electronic nature of land transactions nowadays, the LTA updates the timeframes within which compensation can be claimed. Under the old Act, to be able to claim compensation, the purchaser, through their solicitor, was required to obtain a guaranteed search of the record of title within 14 days of settlement and to lodge the transfer and/or mortgage for registration within two months of settlement. The LTA has reduced the timeframe for the guaranteed search to be obtained within 5 working days of settlement and the period for lodgement to 20 working days after settlement.
There are, of course, many other changes to the LTA. If you have questions about the changes mentioned in this article, or any others under the new legislation then one of our friendly property team would be more than happy to talk them over with you.