Introduction

We trust you will find this publication both newsy and useful. For further information regarding us and our services, including full Land and PPSR search and registration, please visit www.landinfo.net.nz

.:: AN EXTENSION OF YOUR OFFICE ::.

Welcome to the September issue of our newsletter. We (like all property specialists and professionals) are pleased to be still enjoying a very buoyant property market and the associated flow on effects. We are experiencing unprecedented winter demand at the same levels as last summer, and like everyone, we can only speculate at the ongoing continuation through into the summer of 2004, when land activity is traditionally at it's highest. The Reserve Bank is making noises about the possibilities of increasing interest rates to hedge housing inflation; we will be looking at the next monetary policy with interest. Rest assured our systems and procedures are being continually reviewed to ensure our response time to you is meeting your expectations as we move into the busy summer months.

Who would believe that Christmas is fast approaching and we are now looking at times for our Auckland and Hamilton annual client function in November (where has the year gone). Tentative dates are 7th November 2003 for our Auckland Office and 14th November 2003 for our Hamilton Office. We do hope all our clients can make it along to relax and enjoy some friendly interaction with colleagues and the staff of LANDinfoNET Limited. Firm dates and locations will be advised within our invitations.

LANDinfoNET Limited Strengthening relationships with LINZ

We have always been conscious of our need to continually build on our working relationship with LINZ to help gain insights into the processes and form priceless contacts. With all the recent changes happening inside LINZ we felt it timely to meet again with LINZ key staff. We were fortunate enough for the Hamilton office to give our staff a tour of "behind the scenes" and to meet with the people responsible for the day-to-day workings, seeing first hand the internal processes of registration from lodgement to registered status. Both LINZ and ourselves found the experience rewarding and to have definite future benefit to all.

LINZ has recently taken on a new CEO, Brendan Boyle (former RGL, and recently from the State Services Commission for E.Government), we were very pleased LINZ extended an invitation for us to meet with Brendan, the meeting and future contact was very valuable and we were able to voice a number of issues that we will inform you on as they are worked through and progress made.

Average time for new titles to issue and plans to approve

Please refer to the table above setting out LINZ's guidelines and the average times we are experiencing. These averages are consistent throughout New Zealand.

Please be aware we are unable to request LINZ to give priority or urgency ahead of other dealings until the expiration of LINZ's performance standard time frames (shown above) 35 working days for new Titles documentation and 65 working days for parallel registration.

Should you feel circumstances permit for you to request priority over other prior lodged new title documentation, please forward a formal letter addressed to the Processing Centre Manager of LINZ, outlining your reasons for special priority. We will submit this letter on your behalf and advise you of LINZ's intention.

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Land covenants in stage developed subdivisions

There is a potential problem to be wary of when setting up land covenants to be registered over subdivisions that will be developed in stages by more than one plan.

These types of subdivisions can sometimes be identified because there will be one allotment on the new subdivision plan that will be significantly larger than any of the other allotments in the subdivision. This larger allotment will sometimes represent the residue of the land and you will need to determine if it is the developer's intention to further subdivide at a later stage.

What sometimes happens is that all of the allotments in the subdivision will have a land covenant scheme registered against them to protect the subdivision.

From a registration point of view, it is important that this residue area is kept free of the burden of any land covenants. If the burden of the land covenants are registered against the residue area, then when it is further subdivided there will be a problem gaining consents or surrenders, to the land covenant from the many and various owners of the previous subdivided stages, with any allotments on the new plan that are referred to thereon as vesting for various purposes such as road or reserve.

The relevant law

• A land covenant is an interest in land according to Section 126A(1)(c) Property Law Act 1952.
• Section 224(b)(i) Resource Management Act 1991 requires that every registered proprietor of an interest in land provide written consent to any land vesting in a subdivision.

This means that if you have a subdivision, and there are allotment/s on the plan to vest, any registered proprietor of an interest in the land will need to consent to the subdivision. To fulfil this requirement we commonly see mortgagee's partially discharging their mortgage as to any land to vest.

In the case of a land covenant, the persons who have the benefit of the covenants i.e. dominant owners, need to surrender their interest as to the land to vest (This would include obtaining the consents of any mortgagees on the dominant land too).

The dominant owners could of course 'consent' to the vesting (as required by the Resource Management Act 1991) but this would only have the effect of removing the land covenant from the vested areas and not any residue area to be subdivided later. Consenting would not be the preferred option because the land covenant will still affect any allotments to vest on future stage plans.

The problem is one of organising surrenders of land covenants that could potentially involve many dominant owners and their mortgagees. Alternatively, a Court Order under Section 126G Property Law Act 1952 could be sought to remove the Land Covenant. Either result could be a very time consuming and costly exercise. Therefore, if it can be avoided, do not register the burden of land covenants against an area of land that is to be further subdivided where there will be allotments on that further subdivision plan referred to as vesting for certain purposes.

Rejections fees - LANDinfoNET Limited's rejection fee elimination strategy

Rejection fees are now a realty with processing documentation through Land Information New Zealand. Our awareness of your need to be able to quote and charge clients in a clear and accurate fashion prompted us to develop a strategy to eliminate this risk from your process. We recommend that in all cases you request us to obtain a pre registration search at a reduced cost of $7.00 inclusive of GST and LINZ disbursement. By employing this strategy and complying with any pre registration recommendations we advise, LANDinfoNET Limited will guarantee you against rejection fees.

Should you wish to proceed without employing our strategy please forward your most recent search with your dealing to enable us to cross reference to ensure the next most accurate submission of your dealing. However should any documentation be affected and a rejection fee incurred where a pre registration search would have identified the potential problem or you have decided to continue with registration despite our recommendations any rejection fees will be your care.

Click here to read our recent newsflash, which highlights the introduction of rejection fees and our strategy to eliminate the risk of incurring any rejection fee from your transactions.

Our Land Transfer Consultants Roger Fielding and Barry Green are always available for consultancy and technical advice issues on these and any other matters. Please do not hesitate to contact them with queries.

Roger 0508 524251 LANDinfoNET Limited Hamilton rogerf@landinfo.net.nz
Barry 0800 106206 LANDinfoNET Limited Auckland barryg@landinfo.net.nz

Roger and Barry have a prior cumulative experience of working with LINZ as senior Land Registrar for over 40 years please ensure you utilise their ongoing knowledge and recourses as an "extension of your office". A team of our registration agents to ensure they are free for high-end consultancy supports Roger and Barry.

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New services available

As part of our ongoing commitment to be your "one stop shop" for all your search and registration requirements we can now offer the following services to you and your clients.

• Latest rating valuations on property, search can be made on legal description, registered proprietor or street address, cost involved is $15.00 agency $3.00 disbursements
• Sales history/information on property, search can be made on legal description, registered proprietor or street address, cost involved is $15.00 agency disbursements are variable depending on the information required.
• AUSTRALIAN TITLES SEARCHES, we are now completing searches of Australian property usually on a same day turnaround basis. Cost involved is NZ$25.00 agency NZ$20.00 disbursements.
• AUSTRALIAN COMPANY SEARCHES, we are now completing searches of Australian incorporated companies usually on a same day turnaround basis. Cost involved is NZ$30.00 agency NZ$40.00 disbursements.
  
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PPSR update

LANDinfoNET Limited is now offering two new services:

1. Compliance With Section 148:
Let us take care of the whole process of registration for you on the Personal Property & Securities Register, including notifying the debtor pursuant to section 148 of the PPSA.

Section 148 states that the secured party who registered the financing statement or financing change statement must, not later than 15 working days after the day on which the verification statement was received, give to the debtor a copy of the verification statement unless the debtor has waived this right in writing.

Although there is no statutory fine or imprisonment penalty under the PPSA for non-compliance with section 148, section 176 entitles any party entitled to receive notice to damages for any reasonably foreseeable loss.

LANDinfoNET Limited can now unburden you and your client (the secured party) by sending the verification statement to the debtor with a covering letter on the day we register the security interest on the PPSR. We can also then field and respond to any querying phone calls from confused debtors, lightening your load even more.

2. Important Information Notice On Our Covering Letter:
In response to client feedback, upon LANDinfoNET Limited registering security interests onto the PPSR, if in our experience we feel there are aspects of the registration that need revising or amending we will bring to your attention. If we cannot contact you immediately, rather than us rejecting the registration or returning it to you causing delays, in certain instances (situation permitting) we will register immediately to obtain your priority and notify you of our advice on our standard covering letter for new registrations. This "important information notice" will be underlined and highlighted on the letter to draw it to your attention quickly.

This means that if you would like to follow our advice, or following independent advice you would like us to register a financing change statement, we can do this without it having delayed registration. Please note that section 160(2) states that the amendment is effective from the time that the financing change statement is registered. This means that the amendment will take effect from the date the financing change statement is registered, and not from the original date and time of registration.

Verification Statements When Changes Are Made to The Secured Party:
As we are receiving some enquires on this matter you may already be aware that presently when you alter details in a secured party group or transfer financing statements from one secured party group to another, a verification statement is not generated. Confirmation of the alteration is forwarded if an amendment is made to an email address, fax number or contact address in the form of an amended SPG report, or a transfer report is forwarded if a financing statement is transferred from one SPG to another. As a verification statement is not generated, the question we are being asked is "How do I comply with section 148?"

The Ministry is currently looking into this situation and one of the options being discussed is building or enhancing the current system so that it will in the future create a verification statement in the abovementioned circumstances. The proposed enhancement would be an optional choice to receive a verification statement. This means that if you were registering a global transfer affecting 10,000 financing statements, you wouldn't have to receive 10,000 verification statements if you didn't require them. The Ministry is providing whatever assistance is necessary at present to help us comply with section 148 upon our request.

At the moment we have found that a search of the financing statement showing the amendments can be forwarded to the debtor with a covering letter. The only difference between the financing statement and the verification statement is that the financing statement will not contain the debtor pin. As one is not generated upon the registration of the amendment to the SPG or transfer, the original debtor pin will still be current.

It is also possible to utilise the transfer reports generated to comply with section 148. However in the situation of a global transfer with different debtors involved, you may wish to reconsider sending a full transfer report (containing a list of all the financing statements affected) for reasons of privacy. In this circumstance, carrying out individual searches of each financing statement would be in our opinion advisable.

Frequently Asked Questions:

Q: What do the /C0001 and the /D0001 on the end of a financing statement number mean and what is the difference between them?

A: Financing statements with a history have a suffixed registration number or version number. The version begins with C when that financing change statement was initiated by the secured party and D when that financing change statement was initiated by the debtor.

Q: Do I have to register the guarantor or covenanter as another debtor on a financing statement?

A: If the guarantee is unsecured then there is nothing to be registered and the name of the guarantor/covenanter does not appear on the financing statement covering the assets of the primary debtor. If the guarantor is providing security, then there should be a second financing statement naming the guarantor as the debtor and specifying the collateral taken in support of the guarantee.

Q: Can I still register old Debentures and Instruments By Way of Security on the PPSR?

A: Yes you can, however they will not retain their original priorities, they would have to have been registered within the transitional period (between 1 May and 30 October 2002) to keep the original priority date. They will instead have a priority time and date of when they actually get registered onto the PPSR in the same way a new registration does.

Our PPSR Consultant Janelle Weir (supported by Marian Kempster) is available for consultancy and technical advice issues. Please do not hesitate to contact Janelle or Marian with queries.

Janelle 0800 106 206 LANDinfoNET Limited Auckland janellew@landinfo.net.nz
Marian 0508 534 251 LANDinfoNET Limited Hamilton mariank@landinfo.net.nz

LANDinfoNET Limited has been registering financing statements since the conception of the PPSR, although there is no case law to provide rulings, our knowledge is forever increasing from our policy of having the latest resources available along with discussing issues with liquidators, accountants and financial institutions. Please ensure you utilise our ongoing knowledge and resources as an "extension of your office". Both Janelle and Marian are supported by a team of our PPSR search and registration agents.

A full PPSR search and registration service is available on our web site www.landinfo.net.nz alternatively www.ppsrinfo.net.nz will also take you the same site.

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Annual renewal of LINZ digital certificates

Digital Certificates have a life span of 12 months, therefore if you signed up for one or more certificates this time last year, you will be contacted by LINZ shortly notifying you that your Digital Certificate is due for renewal.

The annual renewal process involves the following:

• If your proof of ID you supplied when you applied for your digital certificate is due to expire, you will need to provide a current Government issued proof of ID, complete and submit the appropriate forms before the expiry of your digital certificate
• Deletion of your old certificate and entering the new codes supplied by LINZ to enable you to download the new digital certificate
• Payment of further fees of $46.00 for each certificate
• Payment of further fees for each licence of $200 for spatial and $80 for non-spatial licences upon their expiry

LANDinfoNET Limited has a staff of 26, 20 of which are fully trained in the Landonline system and processes and each having their own digital certificate. This enables us to provide accurate and timely searches to a number of our solicitor clients.

An additional benefit of utilising LANDinfoNET Limited's title searching service, is that we notify our clients via email of Landonline delays, system failures etc. These are issues that LINZ occasionally advertise on their website, but not in every instance.

LANDinfoNET Limited provides a comprehensive, value added service, complete with historical records held on all transactions and systemised accounting procedures. Should you prefer a pay as you go system for these services with even the more difficult requests getting results from our experienced staff. Please contact us so we can show you how we can be of benefit to you.

Contact Ken Hix, Business Development Manager kenh@landinfo.net.nz.

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Real Estate Statistics

A slow down in sales in June has had little affect on median sales prices, even though the seasonally expected slow in sale numbers from May they are still considerably well ahead of June last year. July has seen an increase in price and a recovery to over 10,000 sales recorded in the month. August has proven to be just as robust with the number of sales again exceeding 10,000 and the average days to sell now down to 25. Auckland's resilience through the traditional quiet time has held up the national average as in dollar terms the Auckland market represents in excess of 51% of the now 2.6 billion dollar monthly market.
Click here to view a table which depicts averages across New Zealand.

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Your issues of interest (legal practitioners network)

We would like to extend an invitation for you to forward any situations regarding the legal implementation of land you have recently encountered, that you would like to share with others. We would like to offer this as a regular feature of this Newsletter as an informative tool to help enlighten your colleagues of unusual situations or traps for the unwary. To help us encourage a network forum for the benefit of legal practitioners any published articles would be accompanied by the authors name and contact address. LANDinfoNET Limited will have sole discretion as to relevance of articles published. Please forward all correspondence to Ken Hix at kenh@landinfo.net.nz. (N.B. no form of advertising will be published.

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Westpac NZ Housing Market

A roundup of New Zealand Market Indicators as at 31 March 2003

Click here to view this invaluable information. We are grateful to have this supplied by:
Westpac Economic Unit.

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