Māori land transaction compliance issues
Following a compliance audit of Māori land-related e-dealings, the Landonline website has been updated to include reference information on compliance issues for conveyancers.
The 2008 compliance audit indicated some lawyers were not familiar with the legislative requirements around Māori land dealing, and did not always recognise when a transaction should be referred to the Māori Land Court for confirmation.
In addition to the new website content (summarised below), further information on Māori land compliance issues is available from the New Zealand Law Society (NZLS). An article in the March 2009 issue of Property Lawyer outlines controls that have been put in place to provide assurance that Māori Land Court confirmation has, where necessary, been obtained for e-dealing transactions affecting Māori freehold land.
Answers to frequently asked questions on compliance issues are available on this website.
Compliance responsibilities
The Te Ture Whenua Māori Act 1993 (the Act) puts a number of responsibilities on conveyancers acting in land transactions that change the ownership status of Māori land. The Act gives the Māori Land Court jurisdiction to determine by status order the particular status of any parcel of land.
In general, where Māori freehold land is to be alienated, an application for confirmation must first be made to the Māori Land Court. Specific requirements vary according to the type of land dealing. While the requirements are clear for straightforward transactions such as transfer and mortgages, other less common transactions (such as lease variations) are not so explicitly addressed in the legislation.
The lawyer's responsibility when acting in a Māori land transaction is to ensure compliance issues are addressed. In Marshall vs Registrar-General of Land1,the High Court went so far as to say that "the heaviest responsibility surely lay on the solicitor in control of the transaction". The decision also alludes to the possible subrogation issues between the Registrar-General of Land and the practitioner responsible in cases where land is transferred without confirmation.
LINZ is responsible, via the Registrar-General of Land, for ensuring transactions affecting Māori land are not registered unless the requisite confirmation is obtained, as required by section 126 of the Act.
Determining the ownership status of land
One of the challenges facing LINZ and lawyers in these matters is how to correctly identify Māori freehold land within the land transfer system. If a land title is noted with an order declaring status, ownership will be self-evident.
Alternatively, potential Māori land status may be inferred from the land description or other historical entries on the title (e.g. prior Māori Land Court vesting orders). Indications of Māori land ownership may include a Māori block name or possibly a succession of owners with Māori names. Refer to article Māori land certification, in the May 2008 edition of Landwrap, for further information.
If in doubt, practitioners should make appropriate inquiries with the Māori Land Court. As a first step, you could consult Māori Land Online.
A joint LINZ and Ministry of Justice project to remove discrepancies between the Māori Land Court's title records and those held by LINZ has been underway since 2004, and should be completed by the end of 2009. As status orders are being registered as part of this process, this will help to address the Māori land identification issues.
e-dealing system controls
The statutory scheme for the e-dealing system relies on lawyers' certifications as to client authority, identity and statutory compliance. A document summarising e-dealing statutory requirements - PDF 1.6MB is available on this website.
It was recognised several years ago that in order to extend the certification process to the requirements of the Act, further steps would be required to comprehensively identify potential Māori land within Landonline. In consultation with the Māori Land Court, LINZ developed a regime to identify and electronically flag potential Māori land based on its own records and data supplied by the Court. The flag provides a prompt for lawyers to address the compliance issues and triggers special e-dealing certification options for the Act.
Despite the above controls, in more than a few instances lawyers have made certifications indicating the Māori land compliance issues have been properly addressed when in fact they have not.
Accordingly, LINZ has made changes to the system so that any transactions against flagged titles step down to lodge for additional quality assurance by LINZ staff prior to registration. In practice, conveyancers are required to lodge an image of the confirmation notice at the above stage of their e-dealing transaction on Landonline. Where confirmation is not required, they are asked to provide evidence of this instruction.
Of course, the above flagging system is merely a compliance backstop and does not remove a lawyer's responsibility to investigate land status early in the transaction, and obtain Māori Land Court confirmation where required (refer to article Māori land certification).
LINZ will continue to monitor compliance trends in this area and review its controls as appropriate. Cases of non-compliance are treated seriously and referred to the NZLS' Lawyers Complaints Service.
How to remove an incorrect flag
From time to time, practitioners will encounter flagged titles that are in fact general land. If you are certain the land is general land, proceed with your e-dealing by making a certification that you are complying with the Act.
Phone in or send evidence the land is general land to LINZ Customer Support and ask for the flag to be removed. In some cases, information on a historical title will be sufficient evidence. In other cases you may decide to attach correspondence with the Māori Land Court. LINZ will then arrange to have flags removed, if appropriate.
to save the changes and close the Maintain Firm screen.