Mortgagee's authorisation and instruction to lodge new mortgages for registration
The landowner-mortgagor's lawyer or conveyancer often certifies a new mortgage on behalf of the mortgagee as well as the mortgagor, or a discharge of an existing mortgage on behalf of the mortgagee. This is fine providing the certifying lawyer or conveyancer has been properly instructed by the mortgagee, and holds evidence of that.
It is not sufficient for the mortgagor's lawyer or conveyancer to rely on instructions from the mortgagee's solicitor unless that solicitor is acting as an authorised signatory or under a written authority such as a power of attorney that includes specific power to issue such instructions on the mortgagee's behalf.
Before certifying a new electronic mortgage or an electronic discharge on behalf of the mortgagee, a lawyer or conveyancer must ensure he or she holds the authority and instruction to do so, from:
- The mortgagee directly (e.g. using the NZLS personal or corporate Authority and Instructions (A&I) forms, or an institutional mortgagee's discharge instrument or instruction letter as suggested in Parts "P" and "Q" of the NZLS e-dealing Guidelines), or
- An authorised signatory (in terms of section 180 of the Companies Act 1993) or a person with written authority or power of attorney from the mortgagee giving them power to issue mortgage instructions on the mortgagee's behalf.
If the mortgagee chooses not to instruct the landowner-mortgagor's lawyer or conveyancer, then the mortgagee's own lawyer or conveyancer can certify on behalf of the mortgagee in a multi-party e-dealing.
Removal of caveats, notices of claim, charges and other interests
A transfer instrument is often preceded in an e-dealing by a withdrawal of caveat or notice of claim, discharge of a statutory land charge, or a removal of some other matter, so the transferor can pass clear title. If the transferor's lawyer or conveyancer certifies the withdrawal, discharge or removal, he or she must hold evidence of authority and instruction to the same standard as is required for a discharge of mortgage.
In other words, the certifying lawyer or conveyancer must hold an A&I form in one of the forms published by the NZLS (or equivalent) in the case of a 'private' caveator, claimant, chargeholder or other interest-holder. However, if a caveator or chargeholder is an institutional chargeholder, the authority may be a paper withdrawal or discharge or other evidence of authority as specified in Part "Q" of the NZLS e-dealing Guidelines.
The authority must be given directly to the certifying lawyer or conveyancer. It is not sufficient for the transferor's lawyer or conveyancer to rely on instructions from the caveator or chargeholder's solicitor unless that solicitor is acting under a written authority to provide such instructions. If the caveator or chargeholder chooses not to instruct the transferor's lawyer or conveyancer then their own solicitor can certify on their behalf in a multi-party e-dealing.
Court orders
If a court has ordered the removal of a caveat, notice of claim or a charge, then the sealed order will be adequate evidence to support a practitioner's certification of the relevant discharge instrument.
By contrast, a court order vesting land whether by the High Court, Māori Land Court or some other court of competent jurisdiction cannot be registered or effected by transfer via the e-dealing system. For legal reasons, a vesting order cannot be lodged electronically and must instead be lodged manually as a paper document.
Easements by e-dealing
Release 3.1 introduced functionality that allows easement instruments to be lodged electronically. Below is an example of a complex easement and a comparison of the old paper lodgement process to the new electronic method.
Scenario
A new easement with multiple grantors and grantees, 14 different solicitors representing the various parties, and because most of the titles contain mortgages, consents are required.
Paper process
- Obtain agreement from all parties on the terms and conditions of the easement.
- Prepare and circulate the original paper easement for execution by all parties. (This requires extensive co-ordination between all parties and may include trying to ensure that each successive party forwards on to the next, or alternatively, returning to the originator who sends it to the next party.)
There are a number of problems inherent with this practice including:
- not being correctly signed or witnessed
- the easement goes missing
- ownership changes after signing but prior to registration, or
- the mortgagee of one or more of the parties changes.
The longer it takes to circulate the document, the greater the risk of the last three factors occurring.
- Obtain consent of mortgagees on the standard paper form.
Electronic process
- Obtain agreement from all parties on the terms and conditions of the easement.
- Obtain an Authority and Instruction form (A&I) only from the party you are certifying and signing on behalf of.
- (In this scenario, you would only be obtaining one or two A&Is as most parties are separately represented.) The full content of the easement need not be attached to the A&I. The minimum information should be:
- title
- instrument type
- other party
- nature e.g. ROW
- DP number
- The mortgagee's consent needs to be obtained for the party you are certifying for. That consent will display as a separate certification at the time of signing. (Unless it is a new title dealing – see below.)
Where the mortgagee is a bank or 'institutional chargeholder' (as defined in the NZLS e-dealing Guidelines) consent can be in the traditional form OR by letter, fax or email. This works in a similar manner to an authority from a bank to register a discharge electronically. As always, you must be confident of the authenticity of the consent, especially if received by email. Ordinarily you would have initiated the request for consent, which should give a level of confidence as to its bona fides.
- The A&Is and mortgagees' consents can all occur simultaneously.
- All relevant parties (Primary Contacts and Conveyancing Professionals) are added to the Roles section for that instrument in the 'Create Dealing' screen.
- The final agreed version of the terms and conditions for the easement is attached electronically by highlighting the easement in the 'Create Dealing' screen and selecting 'Prepare'. Each solicitor then certifies and signs on behalf of their own client. The protection is that any change to the terms and conditions will remove all certifications and signing.
When to attach consent to an easement
Where an Order for New Certificate of Title (OCT) is included in the e-dealing, Landonline cannot determine whether there are mortgages on the new titles when the new titles are yet to issue. As a result, the special certification for the mortgagee's consent won't display.
Where there is an OCT in the same dealing as an easement, you need to attach the mortgagee's consent to that easement. This may be in whatever form the bank provides, including attaching consent by email.
If the mortgagee is not a bank or institutional chargeholder, then the traditional form or consent that would have been required in paper must be used.
In summary, if an instrument required consent in paper, then consent is still required for e-dealing. The difference is that where the special certification as to the consent displays at signing, the consent doesn't need to be attached to the e-dealing. If that certification doesn't display, the consent must be attached to the instrument.
e-dealing watch points for practioners
e-dealing watch points are continually being added to. You will find these and links to other e-dealing related articles on this website.
PDFs can now be attached directly to e-dealing instruments
Release 3.1 introduced the ability to attach a PDF document directly to an e-dealing instrument. Landonline will now automatically convert this into a TIFF format.
When attaching your PDF document, a warning message will appear to advise you to check the image. This is because there are so many different versions of PDF available.
It is always good practice to preview any instrument to ensure that you are attaching the final version and that all pages have attached correctly.
New title dealings
LINZ staff cannot change the order of instruments, the instrument code or amend/add title references once they have been electronically lodged. If instruments have not been entered in the correct order with the correct code and all relevant titles in the 'Create Dealing' screen, they will be rejected.
Steps you can take to avoid this happening:
- Always check that your instruments display in the 'Create Dealing' screen in the order they should be registered with the correct code (Type) and no titles have been omitted.
- Multi Order for New Certificate Title (OCT) instruments are not required if they are for the same LT plan. Scan all the OCT documentation as one instrument. By doing it this way, the instrument will be processed much quicker.
- Lodge one OCT where possible.
- Unit developments – unit titles are issued off the Application to Deposit the Unit Plan (UAPP), therefore an OCT is not required.
Please note that an OCT does not need to be signed by the client or witnessed. The solicitor signs the OCT electronically, which equates to the same as signing a paper OCT.
