New Zealand Law Society - The Land Transfer Act 2017 – Identity and Beyond

The Land Transfer Act 2017 – Identity and Beyond

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The Land Transfer Act 2017 has, by popular demand, been renamed the Land Transfer, Identity Verification, Risk Assessment, Respect of Practitioners’ Role in Upholding the Register, and Not-quite-indefeasible Title Act 2017. It hasn’t really, I just made that up. But it highlights that this legislation, which comes into force later this year, has many dimensions.

Earlier updates have canvassed a few changes. The terms “certificate of title” and “computer register” have now become “record of title” (RT). A record of title is scratchier than its predecessors, as indefeasibility of title is not subject to the manifest injustice provisions of section 55, allowing registration to be set aside in various (but largely unknown) circumstances. Covenants can now be recorded on titles – that is, RTs – by means of a covenant instrument. There is also provision for covenants in gross: covenants over land but in favour of a person, rather than other land. Guaranteed search timeframes have been shortened.

Consultation on secondary legislation ran through March and April, and feedback on this consultation is expected in early July. A broad suite of documents have been prepared, including proposed Land Transfer Regulations 2018, and proposed standards for identity verification, certification of electronic instruments, boundary changes, withholding of information, recording of memorials, and the allocation of certification rights. There is also a proposed directive on requisition periods.

Even if its phrasing might seem somewhat analogue, the legislation is more electronic, more digital. Practitioners remain the guardians of the galaxy register, responsible for verifying identity and certifying electronic instruments, though the Registrar-General of Land retains oversight, and has extensive but clarified powers.

AV technology

The proposed standard as to identity verification allows the use of audio visual technology when verifying identity, but only for a client that a practitioner has known for over 12 months, and not where the practitioner has doubts as to identity, capacity, duress, or there are technological limits such that the practitioner “is unable to simultaneously see and hear the client and clearly see what documents are being signed for the duration of the verification of identity session”.

In the case of a new or unknown client, use of audio visual technology will not be an option. There are separate requirements for standard verification, and high risk transactions, with it being a matter of “overall judgement” as to whether a transaction is high risk, along with various points, such as a new client transferring unencumbered land, or a transaction involving related parties or a power of attorney. The complications of these scenarios will be well-known to most lawyers and legal executives, and serve as a reminder of continued caution and diligence. An existing business relationship or personal knowledge of the client may diminish a high risk scenario. Verification information must be held for 10 years, though the use of the words “documentary evidence” makes it unclear just how digital this retention may be.

The proposed regulations cover the typical easements we know and deal with, including the right to convey water, drain water, drain sewage, a right of way, and a right to convey electricity; telecommunications and computer media, and gas. Missing, perhaps, are implied terms for party walls, and some drafting infelicities will need to be ironed out. What might next be necessary is further regulation around utility easements, but that is a matter outside the scope of this legislation.

Alongside the new Land Transfer Act, Land Transfer Regulations, various standards, and a directive, lawyers are also seeing a new regime around what is colloquially called “AML”. Put simply, compliance requirements are increasing, and given that lawyers will need to (a) pay close attention; and (b) certify, in most cases, that they have paid close attention, the Land Transfer, Identity Verification, Risk Assessment, Respect of Practitioners’ Role in Upholding the Register, and Not-quite-indefeasible Title Act 2017 better does justice to the subject-matter of the new legislation.

Thomas Gibbons is a director of Hamilton law firm McCaw Lewis. He has written and presented extensively on property law and is author of A Practical Guide to the Land Transfer Act 2017 (LexisNexis NZ Ltd).

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