Easements by e-dealing

Release 3.1 introduced functionality that allows easement instruments to be lodged electronically. Below is an example of a complex easement and a comparison of the old paper lodgement process to the new electronic method.

Scenario

A new easement with multiple grantors and grantees, 14 different solicitors representing the various parties, and because most of the titles contain mortgages, consents are required.

Paper process

1. Obtain agreement from all parties on the terms and conditions of the easement.
2. Prepare and circulate the original paper easement for execution by all parties. (This requires extensive co-ordination between all parties and may include trying to ensure that each successive party forwards on to the next, or alternatively, returning to the originator who sends it to the next party.)

   There are a number of problems inherent with this practice including:

   • not being correctly signed or witnessed
   • the easement goes missing
   • ownership changes after signing but prior to registration, or
   • the mortgagee of one or more of the parties changes.

   The longer it takes to circulate the document, the greater the risk of the last three factors occurring.

3. Obtain consent of mortgagees on the standard paper form.

Electronic process

1. Obtain agreement from all parties on the terms and conditions of the easement.
2. Obtain an Authority and Instruction form (A&I) only from the party you are certifying and signing on behalf of.
   • (In this scenario, you would only be obtaining one or two A&Is as most parties are separately represented.) The full content of the easement need not be attached to the A&I. The minimum information should be:
     • title
     • instrument type
     • other party
     • nature e.g. ROW
     • DP number
3. The mortgagee's consent needs to be obtained for the party you are certifying for. That consent will display as a separate certification at the time of signing. (Unless it is a new title dealing – see below.)

   Where the mortgagee is a bank or 'institutional chargeholder' (as defined in the NZLS e-dealing Guidelines) consent can be in the traditional form OR by letter, fax or email. This works in a similar manner to an authority from a bank to register a discharge electronically. As always, you must be confident of the authenticity of the consent, especially if received by email. Ordinarily you would have initiated the request for consent, which should give a level of confidence as to its bona fides.

4. The A&Is and mortgagees' consents can all occur simultaneously.
5. All relevant parties (Primary Contacts and Conveyancing Professionals) are added to the Roles section for that instrument in the 'Create Dealing' screen.
6. The final agreed version of the terms and conditions for the easement is attached electronically by highlighting the easement in the 'Create Dealing' screen and selecting 'Prepare'. Each solicitor then certifies and signs on behalf of their own client. The protection is that any change to the terms and conditions will remove all certifications and signing.

When to attach consent to an easement

Where an Order for New Certificate of Title (OCT) is included in the e-dealing, Landonline cannot determine whether there are mortgages on the new titles when the new titles are yet to issue. As a result, the special certification for the mortgagee's consent won't display.

Where there is an OCT in the same dealing as an easement, you need to attach the mortgagee's consent to that easement. This may be in whatever form the bank provides, including attaching consent by email.

If the mortgagee is not a bank or institutional chargeholder, then the traditional form or consent that would have been required in paper must be used.

In summary, if an instrument required consent in paper, then consent is still required for e-dealing. The difference is that where the special certification as to the consent displays at signing, the consent doesn't need to be attached to the e-dealing. If that certification doesn't display, the consent must be attached to the instrument.

This article has kindly been republished courtesy of Land Information New Zealand.  To view this article and other news updates from LINZ click here

Posted: 3 Dec 2008

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