Landwrap March 2009 - e-dealing

Memorandum of Priority – preparation and signing

Some conveyancing customers have recently asked for clarification about Memorandum of Priority (MP) instruments, in particular:

• preparation for different rankings of the same mortgage or charge on different titles, and
• the ability to add the primary contact (PC) and conveyancing professional (CP) for the mortgagee losing priority, which is not readily apparent.

Preparation

Even though most situations will see the same firm acting for the owner (mortgagor) and the new lender (mortgagee) taking priority, the default setting for an MP is 'Multi' in the 'Parties' column in the Create Dealing screen (see below).

All parties need to be signed for in an e-dealing. Specifically, the owner, mortgagee gaining priority, (usually the new mortgagee) and the mortgagee(s) losing priority. The system defaults to the same CP representing all parties.

Where any or all of those parties are separately represented, the 'No. of CPs' column needs to be increased to reflect the number of CPs signing/consenting.

Steps to prepare a complex Memorandum of Priority

When you first open the Prepare Memorandum of Priority screen, it displays a blank row with 'First' displayed in the New Ranking field (see below).

1. Review the New Ranking.
2. Select Affected Instrument No – affected instrument numbers for mortgagees/encumbrancees are listed in numeric order in the Affected Instrument No field. These numbers are not necessarily listed in priority (ranking) order. When you change the ranking, they can only be re-ordered within the existing rankings on that title and they must remain sequential.
   
   
   
   
3. Confirm Mortgagee/Encumbrancee details.
4. Confirm Title Ref(s) for each New Ranking.
   
   Each title affected by the MP must be prioritised with an equivalent ranking to those mortgages already on the title. When there is more than one affected title in the MP, click on the Title Ref column to display the Select Titles screen to select the title(s) affected by each affected instrument number for the Mortgagee/Encumbrancee if appropriate.
   
   
   
   
5. Click Add for a blank row in the Memorandum of Priority screen.

The checks that Landonline completes in the Memorandum of Priority screen are:

1. Each Affected Instrument No must not appear more than once against a title. The instrument can appear more than once if it is shown against different titles on each row.
2. Each ranking must not appear more than once for a title. A ranking (e.g. First) can appear on more than one row if it is shown against different titles.
3. Each title must be listed on at least two rows, i.e. must affect at least two instruments.
4. All titles that are listed against the MP in the Create Dealing screen must be used in the Prepare screen.
5. The rankings for instruments selected against each title must be sequential, e.g. 3, 4, 5 and not 1, 4, 6.
6. The rankings for instruments selected against each title must match the original rankings for the instruments, e.g. instruments 3, 4, 5 can be ranked 5, 3, 4 but not 3, 1, 2.

It is possible to rank a group of instruments with affected titles and then further rank those instruments against the remaining affected titles (see below).

Note: The above checks run while the instrument is AUTO REG but some are relaxed if the instrument steps down to Lodge.

Completing certify and sign – examples

• CP 1 is signing for the Mortgagors and Mortgagee MFS Boston Limited (mortgagee giving priority)
• CP 2 is signing for Mortgagee Auckland City Council (mortgagee taking priority)
• CP 3 is signing for Mortgagee Westpac New Zealand Limited (mortgagee giving priority)

1. Review the instrument details.
2. Select the name for the mortgagee(s) or chargeholder(s) you are acting for (see below).
   
   
   
   
3. Save & Close.
4. Check Certifications box for Mortgagee/Chargeholder.
5. Click sign and proceed in the usual manner.

Determination of life estate or lease for life applications on death of life tenant/lessee now e-dealing capable

Applications for determination of life estates or leases for life on death can now be prepared through e-dealing thanks to the introduction of a new transmission type.

The following provides an overview of how the new type is used in the situation where a transmission is prepared against a life estate title.

Preparing the transmission

• In the Prepare Transmission screen, the current default Transmission Type is Survivorship. When creating a transmission against a life estate title, initially the following message displays.
  
  (Note that the dealing steps down to Lodge when the life estate title is added to the dealing.)
  
  
  
  
• Click OK on the message
• Change the Transmission Type to Determination of Life Estate or Lease for Life on Death in the Transmission Type field
  
  
  
  
• Check "Affected Proprietor" checkbox for deceased person
• Enter the Applicant name, e.g. the remaining proprietor already named on the title

Preview

• When the Preview button is clicked, the following message displays:
  
  
  
  
• Click Yes to continue (this is advising that there are two estates with different ownership and the instrument will be viewed and approved by LINZ Processing staff)
• The following message displays:
  
  
  
  
• Click Yes to continue (add text is not required and the instrument has already updated to Complex/Exception mode)

Pre-validate

• The instrument will fail pre-validation for the following reason:
  
  
  
  
• Cancel from the Pre-validation Report

Certify and sign

• The instrument can be certified and signed in the normal manner

Viewing the signed transmission

• The signed transmission will display as follows:
  
  

Submitting the dealing

• When submitting the dealing, the following warning message displays:
  
  
  
  
• Click OK to continue
  
  
  
  
• Click Continue Submit

LINZ will process the dealing and a Registration Confirmation notice will be sent out when the dealing is registered.

e-dealing dispensation requests

Electronic lodgement of land title instruments is now fully mandatory for practitioners as at 23 February 2009.

Practitioner vs registration agent

• A practitioner is a solicitor or conveyancing professional as defined in the Lawyers and Conveyancers Act 2006; or a licensed land broker.
• A registration agent is not a practitioner, but dealings lodged by a registration agent on behalf of a practitioner must be lodged electronically.

Exceptions to electronic lodgement

There are some exceptions to mandatory electronic lodgement:

• Dealings lodged by customers who are not practitioners are not required to be lodged electronically. This means that banks, government departments, accredited suppliers and private individuals doing their own conveyancing are all exceptions to mandatory electronic lodgement.
• Some instrument types cannot be lodged electronically. These include:
  • instruments that must be executed under seal, e.g. an Order of the High Court
  • instrument types that cannot be converted into an electronic format, e.g. a Forestry Agreement (AG) with an aerial photo attached, which means the file size is too large to upload
  • some instrument types that are no longer in use because they have been superseded
  A full list of instrument types that can be lodged electronically is available on this website.
• Any dealing that includes an instrument that cannot be lodged electronically will be accepted as a manual dealing, even if other instruments in the dealing can be lodged electronically.
• Where a manual dealing was lodged before 23 February 2009 and subsequently rejected, the dealing may be re-lodged as a manual dealing.

Dispensations can be requested

• Section 24(3)(b) of the Land Transfer (Computer Registers and Electronic Lodgement) Act 2002 provides for circumstances where it may be impractical or inappropriate to present an instrument electronically. That section gives the Registrar-General of Land (RGL) a discretionary power of dispensation to allow a paper instrument to be lodged instead of lodging electronically.
• This discretion has been delegated from the RGL to LINZ Customer Services, and will be executed by warranted staff within processing centres.
• Customer Services will normally only give a dispensation from mandatory electronic lodgement when a paper instrument has been prepared and executed before the mandatory date, an Authority and Instruction form would be required for it to be lodged as an e-dealing, but a party to the transaction is not available to complete the form.
• Practitioners wishing to obtain a dispensation must make a written application to the processing centre Area Manager outlining the circumstances and applying for a dispensation under Section 24(3)(b) of the Land Transfer (Computer Registers and Electronic Lodgement) Act 2002. The application should be in the form of a letter, which should accompany the dealing when it is lodged manually.
• An application for dispensation is required to be made when a dealing:
  • is a manual dealing lodged on or after 23 February 2009
  • is lodged by a practitioner, and
  • includes only instrument types that can be lodged electronically.

Manual dealing lodged without a dispensation request

• LINZ processing staff will requisition the dealing. The wording of the requisition will be:
  • "Registration prevented – this dealing meets the criteria for electronic lodgement. Please withdraw the dealing from registration and re-lodge electronically."
• There are two options in this instance:
  • make an application for dispensation, or
  • withdraw the manual dealing from registration and lodge a new dealing electronically.