It being Queen’s Birthday weekend and having missed out, again, for I don’t know how many consecutive years on obtaining an award it seemed timely to put pen to paper if for no other reason than to fill the pages of your august journal.
I don’t want to seem curmudgeonly but what exactly does the Property Law Section do about the pragmatic aspects of conveyancing which is, after all, about property law. It is appreciated that the section does excellent service on the esoteric aspects of the genre but the day-to-day grassroots lawyers seem not to be so well served.
Can this section answer the following?
Driver licence ID
Have representations been made to the government (or whosoever authorises driver’s licences – AA?) to revert to having the expiry date of the licence on the front of the licence document?
We are asked to police ID for LINZ dealings. An acceptable, but not always reliable, ID purports to be a photographic ID issued by the government. This is generally accepted to be (only) a driver’s licence or passport. It used to be that a one-page photocopy of a driver’s licence was adequate as it showed the licence currency. For some unknown, and an illogical, reason the expiry date has now been transferred to the reverse of the licence. This now requires two pages to be copied and retained with each A & I form for each person on each transaction.
Result: The profit of the practice of law is hard to sustain as overhead costs eat away at it. The change has doubled the time and cost to obtain proof of ID. A minor cost individually but costly cumulatively.
Land transfer tax statement
How did the Section allow a comparatively simple one-page form to be converted to a nonsensical three-page form? I hear the change was due to “some lawyers” not being able to understand the one-page form. If that is the case and they were confused should they be entitled to practice in the conveyancing field? Hundreds of lawyers practising as conveyancers did not find the form confusing.
Result: This change has resulted in three times the copying and storage costs (see above).
Liaison with the Bankers Association
What liaison does the Section have with the Bankers Association? I have two issues with the cost banking practices impose on practices apropos conveyancing.
The first is an observation and a request. Would it be possible for the Section to advocate to the banks that they give an indication/estimation of the amount they expect to be paid in consideration of the discharge of mortgage at the time the mortgage discharge is requested?
Reason. Colleagues have been surprised at the last minute when settling a transaction to find the amount required by the bank is substantially more than indicated by the client who did not know that all advances, including personal loans, overdrafts, credit cards etc, would need to be repaid if the security was discharged. This has also happened where a separate mortgage over a different property is also “called up” on a sale.
Result: if an indication was made early any problems could be sorted out and negotiated other than on settlement date.
The law firm as a printing company
Banks are crowing about growing and advertising their indecent profits. This is not surprising seeing conveyancers are now their printing companies. It is not uncommon to be required to print 100 pages of bank “stuff” to satisfy the bank requirements for security and disclosure. The bank is happy to electronically provide instructions to practitioners but provides no means, or authority, for the documents to be signed in an electronic form. Yes, there will be a valid (in their minds) reason why they don’t – but we put a man on the moon (I think!) So somehow it should be able to be done.
Result: Signed scanned copies of bank documents are happily received by most banks leaving the paper copies on our files to be destroyed. Some banks require belts and braces. Not only do they require a scanned copy they also require the original “blue ink” copy. When this bank was questioned why they could not answer how many acres of storage they own in order to maintain their file copies of paper documents. I suspect none. They are content to waste our paper, time and cause undue expense just to have the paper copy go to the tip. This is a monumental waste of paper, cost and time. The section could perhaps advocate with the Bankers Association a standardised process to enable the efficient conduct of what is after all a commercial business for both parties.
Why does the ANZ Bank not trust lawyers?
They require a certified copy of an A & I form plus a copy of the title and VID prior to the drawdown of funds indicating that they not do not trust us to do our job. Every other bank appears to trust the profession.
Result. Ask the ANZ to cease this make-work, time-wasting and cost-incurring process.
That is it, for now.
I look forward to a response from the Section, hopefully with proposals as to how it is intended that these problems be resolved by:
- Having the expiry date returned to the front of the licence,
- Simplifying the tax form,
- Bankers Association recommending an indication of debt, electronic signature processes and the ANZ trusting the conveyancers.
Duncan Terris, Chair of the Property Law Section, responds:
The Property Law Section thanks Mr Aislabie for his letter and takes the opportunity to clarify the role and the Section and address some of the issues raised.
By way of background, the Section has more than 1,400 members and provides regular practical and current information to its members via e-bulletins and The Property Lawyer magazine publication. That magazine has regular columns from the Registrar-General of Land and NZLS e-dealing consultant on current practice matters and legislative change.
The Section has regular relationship meetings with all manner of stakeholders that impact on property lawyers. That includes a number of government departments such as LINZ, IRD, MBIE, MOJ, etc. We also meet with senior banking representatives from major banks to discuss current practitioner concerns. That relationship is such that some banks are now prepared to engage with the Section as a ‘sounding board’ for changes to their procedures and documentation.
Members of the Section are often asked to advise of issues or concerns they may have with specific aspects such as bank instructions. The Section then engages with the bank to discuss concerns and look for mutually beneficial solutions. It is also relevant to point out that all of the members of the Executive committee are involved on a daily basis with property files and also have a vested interest in ensuring the greatest efficiency possible.
It is important to note that while the Section welcomes constructive suggestions for improvements that can be made in property law practice, it is not a ‘lobby group’ and must maintain a politically neutral stance. Its statutory function is to provide services and facilities such as seminars, education, training and other materials, in order to represent its members and serve their interests (ss 66 and 68 LCA). As noted above, the Section does make contact with its various stakeholders when appropriate, to try to achieve solutions.
The reality is that virtually all of Mr Aislabie’s points have in fact been historically addressed by the Section and some are ongoing. Some key ones are addressed as follows:
Drivers licences as ID for LINZ dealings
There was extensive analysis of how to mitigate incidence of fraud with the abolition of duplicate paper titles almost 15 years ago in 2002. NZLS was involved extensively in those discussions. There needed to be a balance between the risks and the pragmatism of day-to-day practice. It is also important to note that there are other verification aspects required in addition to just the ID, such as documentation linking that person to the property address.
The Section did liaise with the LTSA with the change in procedure to have the expiry date on the reverse of the licence. The answer is simply that if there is more than one class of licence, they all have different expiry dates, depending upon the requirement for each class. There can be a number of ‘classes’ on one licence such as car, motorcycle, HT, Forklift, etc. There is simply not enough space on the front of a licence to include all that information.
Modern photocopiers allow a piece of paper to be fed through twice, to allow both the front and back of a drivers licence to appear on one page.
The Section was involved with both LINZ and IRD in extensive communications by way of correspondence and meetings regarding the initial and current Tax Statements. The one originally proposed was in fact much longer than what was ultimately used.
As part of this consultation, Section members were consulted. Large numbers of lawyers provided items of feedback on the proposed layout of the form, all of which were considered by LINZ in the final version of the Tax Statement.
The Section is having ongong discussions with LINZ and IRD on specific aspects of concern or confusion. The rationale for the most recent change to the Tax Statement was due to inaccurate information being collected on the forms. It had been discovered that a number of clients were filling in the answer to question Q2.2 incorrectly, which invalidated the data collected in that section. In addition, LINZ had worked with Statistics New Zealand over a more logical layout for the Tax Statement form, to provide for more accurate completion. The data collected on the form complies with statutory requirements.
Liaison with the Bankers’ Association
The Bankers’ Association (NZBA) is a forum for member banks to work together on non-competitive industry issues. It is funded by its member banks and governed by a Council that comprises the chief executive of each member bank. NZBA has a code of banking practice, to which Bankers’ Association members agree to observe, but which is subject to other Codes, Acts of Parliament, or internationally accepted banking standards or practices. Some bank’s competitive products and services may have their own terms and conditions, therefore there is not always consistency in systems or policies between banks. Because of this, the Property Law Section has instead established and continues to build relationships with the individual banks.
Discharge of Mortgage Repayment Estimate
This has been addressed in the latest issue of The Property Lawyer magazine. Mr Aislabie has really answered his own question by reference to the complexities of most clients’ financial arrangements in today’s banking. It is not possible to assess in advance the amount required to discharge a mortgage: the way ‘all obligations’ mortgages are structured, with multiple facilities such as revolving credit, business and personal overdrafts, credit cards etc, means the repayment amount can fluctuate daily. For that reason, most banks simply cannot provide the figure in advance of settlement day and it would be potentially misleading to do so.
Most of the major trading banks do not require hard copy signed documents to be returned if they have been provided electronically. That is certainly the case for ANZ, BNZ, Westpac and Kiwibank. As for the need to print documents for clients, surely it is preferable to receive instructions electronically than the inherent delays caused by waiting for mail or courier. The costs of printing and copying are legitimate office expenses that a reasonable charge may be made by way of an ‘office service’ fee or absorbed in the general fee charged.
The Section has had recent discussions with ANZ around documentation required, which is currently under review.