NOVEMBER :: IN THIS ISSUE                 

Introduction

We trust you will find this publication a helpful addition to your resources.
For further information regarding LANDinfoNET Limited and our services, including full Land and PPSR search and registration, please
visit www.landinfo.net.nz or phone 0800 106 206

.:: AN EXTENSION OF YOUR OFFICE ::.

Comments from the Director, David Graham

There is no denying business is tough for those of us who rely on some form of property transaction to meet the expenses. Recent sales figures in for October 2010 show a 38% drop from October 09 in Auckland, 35% in Whangamata and do we even want to mention LINZ comparison quarters ending Sept 2010 down 39% from 2009 for new Titles issued nationwide, whoa....as they say in New York “that’s gotta hoit”!!

Where we at LANDinfoNET sit right now is acknowledging the doom but never conceding to buy into the gloom, heck we’ve just come off the back of one of the longest most aggressive property boom’s I’ve seen, it’s now like we are back in the 1990’s where breaking even was the norm and a sign of a strong company and profit? Well who wants to pay tax anyway!!!!

Now is a time I really want to acknowledge what we have got not what we haven’t got and with this thought strongly in my mind, I want to give a huge thanks to you our clients many of whom have been with us for over 20 years, for the new, old and anywhere in between. We know that service is paramount when times are tough, and we know we all need to cut costs and for us to have an association with each of you that read this no matter how big, small or frequent. Thank you, we are here for you.

Obviously the next reason why I fail to buy into the gloom is our staff. Sure things are tough, but I am so proud as to how they have stood by us and continue to pull together day in day out. I hate to single people out but length of tenure is something that you just can’t take for granted. Janelle our Manager, she’s so much my right hand I haven’t got a right hand, Janelle’s been with us for over 18 years and needless to say runs the show through bad times and good with both my and her colleagues total respect. Marian is another who has been with us for 18 years, where Janelle is my right hand Marian is surely my left, diligent loyal and believe me she knows Titles. Roger and Dianne both over 10 years, I’ve known Roger previously from the years dealing with him at LINZ, he knows land transfer consultancy and performs at his best constantly. It was a fantastic day when he decided to join us all those years ago. Dianne, as those of you that deal with her know is a pleasure to work with, articulate and professional. Dianne is presently on leave to marry Matt. Last but not least, I have to mention Rachel, Amanda and Greg. Rachel with years of experience at legal firms, Amanda who is currently on Maternity Leave, and Greg with years of experience at LINZ, all three a pleasure to work with and round out our search and registration team perfectly.

Finally, now we are well into November the rest of 2010 will slide by in a flash so many thanks for your support, all the best for 2011 and no matter what happens we are here for the long term.

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LINZ Issues

Charging Orders – by Roger Fielding

High Court case - Gill Construction Company Limited V Morgan & Morgan HC WN CIV-2009-406-100 1 May 2009 reported in Butterworth’s Conveyancing Bulletin September 2009.

The recent High Court case, was in relation to the ability for a charge holder under a Charging Order to make application to have a caveat removed from a title under Section 143 Land Transfer Act 1952. Under that Section a person with a registered interest in the land (includes a charge) could apply to have the caveat removed. The High Court found that a Charging Order constitutes a charge/interest in land (it wasn’t considered to be previously) so the application to remove the caveat by the charge holder under the Charging Order was granted. This would logically apply to applications under Section 145A Land Transfer Act 1952 as well since the same sort of wording is used to describe who can apply to have a caveat lapsed.

Land Information New Zealand (LINZ) have issued a ruling in response to the High Court case which focuses on Section 105 of the Land Transfer Act 1952 and what will happen to a Charging Order in the circumstance where a Mortgagee is exercising their power of sale and there is a Charging Order registered subsequent to the mortgage.

Because a Charging Order is an interest in land, the effect of the exercise of power of sale by a mortgagee exercising their power of sale would now be to remove a Charging Order from a title where the Charging Order was registered subsequent to the Mortgage, whereas before the High Court case, the Charging Order would have prevented the mortgagee from exercising their power of sale. This applies to both High and District Court Charging Orders.

We are not sure why Land Information New Zealand has seemingly widened the Court decision to encompass Transfers in exercise of power of sale under a mortgage when it was only Section 143 of the Land Transfer Act that was considered by the Court. It seems as if the power of a charge holder under a Charging Order has been diminished as a result. One can now imagine a situation where a landowner engages a (friendly?) mortgagee, takes on board substantial debts resulting in a Charging Order, and then gets the mortgagee to exercise their power of sale to rid the title of any Charging Order that has been registered to protect the charge holder’s position.

We have had correspondence with Land Information New Zealand seeking clarification on what their practices will be in relation to Charging Orders in situations other than the ones mentioned above. There is a concern now that since Charging Orders are considered to be a charge/interest in land, practitioners may try to treat them as they might other types of charges that are registered on titles. The result of our correspondence is that the ruling by Land Information is limited in its scope and isn’t intended to open up new areas in respect of the effects of a Charging Order on a title in other situations.

The following is a précis of our correspondence:

• For other dealings with land e.g. transfers, mortgages etc, Land Information New Zealand still consider the Charging Order to be a stop on registration as it always has been (except Transfers exercising power of sale under a mortgage as mentioned above).
• Charging Orders cannot be used in Priority of Mortgage documents to swap the priority of a Charging Order with other mortgages or charges under Section 103(7) Land Transfer Act 1952 as LINZ do not consider a Charging Order to be a type of registered security for the payment of money. Even if they did, they say you would need the holder of the Charging Order to consent to registration and since there is no ability for a charge holder to consent to anything, the Priority of Mortgage Instrument could not be registered anyway. As an aside to the consent issue, a practitioner could be forgiven for thinking that there is an ability for the holder of a Charging Order to consent to a subsequent dealing because a certification line will come up in Landonline asking the practitioner to certify that they have the charge holders consent, which Land Information New Zealand admits is clearly inaccurate in respect of District and High Court Charging Orders, since they cannot consent to anything.
• Even though a Charging Order is considered a charge/interest in land, it cannot be used as the grounds for a caveat.

Just a reminder in general with regard to discharging Charging Orders, that Authority and Instruction forms are required from the charge holder except if the Charging Order is being discharged by way of a Court Order in which case the actual Court Order will serve the same purpose as an Authority and Instruction from the charge holder (Landwrap issue 51).

Application to Note Merger of Lease & Edealing by Dianne Watson

Under Regulation 25 of the Land Transfer Regulations 2002 an Application can be made to merge the fee simple and leasehold estates where both estates are in common ownership. When merging the estates there are three registration options available.

• Transfer and Merger of lease (TMEL) where the fee-simple is transferred to the Lessee, the estates are merged simultaneously and a request under Section 118A Land Transfer Act 1952 is made to bring forward encumbrances from the lease onto the fee-simple.
• Merger of lease (MEL) which is used when both estates are already held in common ownership.
• or, the fee-simple is transferred to the Lessee or the leasehold is transferred to the fee-simple owner where there are no encumbrances to be brought forward.

With the introduction of Landonline, provisions have been made to enable the application to note merger of lease instruments to be registered electronically as ‘Image only instruments requiring certifications (A&I required)’. Land Information New Zealand have created an e-Dealing instrument form for this purpose and this is available on their website. It sets out a request to LINZ to merge the estates and will need to be accompanied by an A&I form which is held off the register to authorise registration.

Regulation 25(2) of the Land Transfer Regulations 2002 states that the application must be supported by a statutory declaration by the registered proprietor. The old paper format for these instruments included a statutory declaration however the LINZ template does not. It would therefore appear that LINZ do not need to sight this declaration however it is still necessary to complete the statutory declaration and hold on file with the A&I forms. A Transfer and merger of lease (TMEL) is an ‘image only – A&I required’ instrument therefore the application will also need to be accompanied by an image of the Transfer as there is no template available in Landonline to complete a transfer that also merges a lease.

NB: In order to merge the fee-simple and the lease:

• Fee simple & lease must be held by the same persons
• Both fee-simple & lease must be in the same tenancy i.e. both joint tenants or both tenants in common with the same shares.
• The fee-simple & lease must be held in the same capacity i.e. both in own right or both in the same trust (cannot have one in their own right and one in trust for other)

Contacting the LANDinfoNET Consultants

Our Land Transfer Consultants Roger Fielding, Greg Strange and Dianne Watson are always available for consultancy and technical advice issues on any matters. Please do not hesitate to contact them with any queries that you have.

Roger 0508 534 251 LANDinfoNET Limited rogerf@landinfo.net.nz
Greg 0508 534 251 LANDinfoNET Limited gregs@landinfo.net.nz
Dianne 0508 534 251 LANDinfoNET Limited diannew@landinfo.net.nz

Roger and Greg have a prior cumulative experience of working with LINZ for over 32 years, please ensure you utilise their ongoing knowledge and resources as an "extension of your office". A team of search and registration clerks support Roger, Dianne, and Greg to ensure they are free for all your consultancy needs.

PPSR/Companies Services

Safe PPSR Practicers by Janelle Weir

As amusingly depicted in Waterstone Insolvency’s latest newsletter, “The PPSR is like safe sex. Inconvenient and a little dull but something you may come to wish dearly you had practiced if things go wrong”. What an entertaining yet accurate metaphor. There’s not much that can put you to sleep faster than the mention of the PPSR, however the fact that still so many are uninformed or unaware of it and its ramifications is pretty scary. Let us know if you need any assistance with “protection”, we’re here to help. With that said.... onto the boring bits.

Due to an unintentional expiry of a financing statement, we were approached by a customer to undertake all their PPSR registrations and maintenance so that we could remind them of future expiries therefore preventing any further registrations dropping of the register. The customers’ customer was particularly interested in our procedure; it is outlined for your information here below.

• Registration of your security is completed on the PPSR (eg; November 2010)
• Details of your registration including you, your firm, your client details and all pins & passwords are automatically uploaded into electronic data tables at the time of registration and held in our secure system for reminders in 5 years time
• A copy of the Verification Statement along with the secured party group ID & password, Financing Statement Pin & Debtor Pin are forwarded to you for your records
• We also retain all pins & passwords in our secure data base as well as retention of manual copies
• Four years & 10 months later...
• We retrieve the data tables for registrations completed in the month of November 2010
• We write to you both by email and post reminding you of the upcoming expiry informing you that if we do not hear back from you within 3 weeks, we will renew the registration

Unless we have a pre-arranged agreement with your firm, our policy is to renew the financing statement if we don’t here back in case; you were away from the office, the person who originally instructed us is no longer there, or maybe your contact details changed and we were not informed. There could be any number of reasons why you did not receive our reminder, as such we err on the side of caution and renew. We feel it provides much safer protection for your client if their security is renewed unnecessarily for the cost of $23.00 than if it expires mistakenly. It is simple and easy to discharge a financing statement, it is impossible to gain back the priority of an expired one.

Handy hints for Keeping ‘Secured Party Group’ Stress to a Minimum!
by Marian Kempster

When creating a secured party group for registering on the PPSR, it is important not to create a new one for an already existing secured party group. If a secured party group (and all its members) are exactly the same, it is recommended that you use the existing one.

This ensures that when making amendments to a SPG’s details, you do not have to complete the amendments to various SPG’s. It also means that when transferring financing statements or searching expiries due, that one SPG needs only be entered and all results are captured.

When creating a SPG which is a trust, just the name of the trust can be used with one of the trustees as the person acting on behalf. This prevents a requirement for updating resigned or amended trustees of the trust on the register.

For any assistance with your PPSR or Companies Office requirements please don’t hesitate to contact: Janelle or Marian on 0800 106 206.

Last Word from the GM

Thank you for taking a few moments to have a quick read about some of the issues we found worth mentioning and also a little about our team. You can find prior issues on our website www.landinfo.net.nz.

On behalf of us all here at Landinfo, we would like to express to you our sincerest appreciation of your continued support and custom. We know there is a lot of fierce competition out there, so thank you for choosing to stick with us and thank you for your loyalty.

Here’s hoping for a successful and prosperous year for us all in 2011. We wish everyone all the best for the remainder of 2010, a very merry Christmas and a safe, fun and relaxing New Year.

If you have any questions regarding this newsletter, please contact:
Janelle Weir, LANDinfoNET’s General Manager on 0800 106 206
or janellew@landinfo.net.nz

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Feel free to phone our call free number 0800 106 206 and ask
for Janelle Weir for further information.