Release of the Law Commission’s Report on the Review of the Land Transfer Act 1952

The Law Commission is proposing new legislation to provide greater protection and clarity for those involved in property transactions in this country.

The Commission’s latest report, tabled in Parliament today, recommends replacing the 58 year old Land Transfer Act with new legislation fit for the electronic era.

“Buying and selling, mortgaging and leasing land affects most people in New Zealand. For these activities we have a modern, electronic system of land transfer.

“But,” says Commissioner John Burrows, “we do not have modern legislation to support such dealings with land.

“In the twenty first century, New Zealand needs a new Land Transfer Act to support its largely electronic system. We need an Act that is accessible and written in plain modern English. The Law Commission, with the assistance of Land Information New Zealand, has drafted such an Act.”

Some provisions in the 1952 Act have remained unchanged from the first Acts passed to implement Robert Torrens’ land registration system well over 100 years ago.

“A comprehensive review of the Land Transfer Act 1952 is long overdue”, the Commissioner says. The Act has been amended frequently over the years and in 2002 an amendment Act was passed to herald the electronic era.

“The result is a mix of hopelessly outdated and obscure provisions alongside more effective modern provisions, some reflecting only the paper registration system and others focussed on electronic registration, with considerable duplication and lack of clarity”.

The Act retains the essentials of the Torrens system of land registration. It introduces some changes to ensure that people continue to be secure in their property ownership. There have been cases where fraudsters have pretended to be owners of property and

obtained registered mortgages on those properties, then disappeared with the money, leaving the true owners unable to pay off the mortgage. The draft Act provides for:

A duty for lenders to take reasonable steps to check the identity of would-be borrowers; and

A power for a Court, in cases of clear injustice, to order correction of the register where a registered owner has lost their home through fraud.

ENDS

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