A Record of title (previously Certificate of Title) is also known as a computer register, unique identifier or property title. It is the official document that shows ownership of the land it describes, and the rights and restrictions that apply to the land.

In New Zealand, most privately owned land (excluding some forms of Māori land) is held under the land title system of the Land Transfer Act 2017 (previously the Land Transfer Act1952) and is subject to public record.

Land Information New Zealand (LINZ) is responsible for all land transfers and for keeping title records. The certificateoftitle.nz is directly connected to LINZ database to provide the most current information registered on the title.

Records of title have been recorded electronically since 2002 and all earlier paper-based records of title were converted into computer registers between 1999 and 2002.

The Land Transfer Act 2017 reflects changes to the predominantly digital environment of electronic registration under which conveyancing and land registration now operates. In November 2018 significant changes to ‘records of title’ were made. This includes changes to historical records of title views on live or part-cancelled titles. Changes include:

• Existing computer registers were updated with a new header:

  • Record of title under Land Transfer Act 2017”

• Registered proprietor is updated to:

  • Registered Owner

• Clarification of Registrar-General of Land’s powers of correction

• A definition of ‘fraud’ which effectively aligns it to current case law

• Changes to the compensation rules regarding assessment/valuation of loss

• Limited discretion for the High Court to return a title to a former owner in cases of manifest injustice

• Provision for covenants in gross to be noted on the title in the same way that other land covenants are

• Protections for people who need to have their land ownership details withheld on the grounds of safety.

A record of title (or certificate of title) is only reliable if it includes all the information currently registered. Otherwise, it is what is known as a ‘stale’ search. The only way to know that for sure, is to obtain your own copy of the record of title. We can do this for you within a few hours.

A copy of a record of title can be requested in any of the following forms:

• Current register – this shows the current registered owner/s, legal description,

registered rights and restrictions; for example, a mortgage. It also includes a plan or

diagram of the land.

• Historic register – this shows all interests registered when the title was created, and

since. It may include a plan or diagram of the land, and / or a scan of any paper

records of title issued.

• ‘Guaranteed search’ – this shows the same information as the current register as well

as any interests lodged with LINZ but not yet registered against the title.

Computer register (record of title)

There are four different types of record of title (legal tenure):

1. Freehold estates

(previously computer freehold registers (CFRs)) for freehold (fee simple) land.

A freehold (fee simple) estate is the highest form of land ownership available in New Zealand. It is as close as possible to absolute ownership of the land and is permanently enduring. The following characteristics define a freehold.

• Unlimited duration (it is not time-limited, unlike a lease)

• If permitted by land and property law, or local or regional territorial authority or unitary authority, the land holder may carry out work such as subdivide, develop, alter buildings, authorise a lease, or impose positive or restrictive covenants on subsequent owners

• Transfer of title is relatively simple, but may require approval from other parties, such as a mortgagee or any caveator (a person who lodges a caveat)

• Sometimes, covenants require consent from a third party entity

A licensee should always obtain their own copy of a record of title.

The most common problems with freeholds are:

• Some owners are unaware of, or intentionally breach, their rights and obligations under land and property law, regulations and local or regional territorial authority or unitary authority rules. Breaches can become problematic for present and future owners. For example, encroachment, breaching a building covenant, unauthorised structures, breaching a resource consent covenant, or informal use of a neighbour’s land or access

• Some owners may also be unaware of the extent of additional beneficial land rights available to them, such as additional water rights and rights of way

2. Leasehold estates

Previously computer interest registers (CIRs)) for leasehold land, or for any land of a lesser interest than freehold

Most leasehold land in New Zealand is held under a Glasgow lease. The principle of a Glasgow lease is that as long as the provisions of the lease have been met the lease will be perpetually renewable.

Some Glasgow leases are now terminating rather than perpetual leases, for example, under the Māori Reserved Land Amendment Act 1997.

A typical Glasgow lease is for a term of 21 years. The land is leased to the owner of the improvements (e.g. structures, crops) who pays ‘ground rent’ to the owner of the land. If the owner of the improvements chooses not to renew the lease, and does not remove them from the land, the improvements will become the property of the landowner. The underlying title to the land is freehold.

When selling leasehold land, you should search the title to establish:

• whether there are any covenants, easements, or restrictions on the freehold title

• what interests feature on the leasehold title. When does the lease expire? Is there a renewal clause?

You should then search for the lease. The lease will explain how often rent reviews should be conducted, and the procedures to establish the new rent.

Ground rent is normally based on the value of the unimproved land. In many cases it equates to 5% to 7% of the land value at the beginning of the lease term. When the lease expires, and is then renewed, the ground rent will be reviewed. After a period of 21 years the land value will be likely to have increased enormously, so the ground rent is also likely to increase. To ease the shock of huge rent increases, many modern Glasgow leases have rent reviews more frequently. These could be every seven years, but even then, the increase may be substantial.

The lessor’s consent is required before the title can be transferred. Failure to do this will put the client lessee in default of the lease terms. If leasehold land is cross leased, and the term of the parent lease is 21 years, the term of the cross lease may read “21 years less one day”.

3. Stratum estates

Under the Unit Titles Act 2010 (previously computer unit title registers (CUTRs)) for stratum in freehold or leasehold interests in a unit-titled development

The stratum (unit) title focuses on ownership of the structures (units), which are usually residential dwellings or smaller commercial units. Under unit titles the common property is owned by the body corporate and is held in trust for the unit owners (section 54 of the Unit Titles Act 2010). The body corporate is responsible for insuring all buildings and other improvements on the land, which is funded (among other things) through levies imposed on the individual owners.

With every unit title there will be a unit plan showing the building structures (known as units) attached to the record of title. These units are categorised as principal units and accessory units.

Before engaging in the sale or lease of a unit title property, the licensee should obtain and review the rules of the body corporate and a pre-contract disclosure statement (in the prescribed Form 18), as these will enable the identification of issues that must be disclosed to prospective purchasers or lessees.

4. Any other estates or interests in land

Previously composite computer registers (CCRs)) which are combinations of the other three types; for example, a cross lease title is a combination of freehold and leasehold computer registers

Cross lease

Cross lease properties usually comprise an underlying estate in fee simple. This gives the joint owners an undivided proportionate share of the total land area, and a long-term lease (usually 999 years), for the specified building and other associated structures. A cross lease provides two layers of rights – rights of ownership and rights of use.

With every cross lease there will be a flats plan showing the footprint of buildings and permanent structures on the land contained in the record of title (e.g. the layout, shape, dimensions of each flat). It is imperative that the external dimensions of each flat are correctly recorded on the title. Any variation between the actual footprint of each flat and what is shown on the title may be an indication that the title is defective. Rectifying a defective title can be expensive and requires the property to be resurveyed by a registered surveyor and a new flats plan registered with LINZ.

There will also be reference to a lease document, recorded as an instrument on the title. It is important to obtain a copy of the lease document and review it before marketing the property. Only in this way can the licensee determine whether there are any issues that might need to be disclosed to prospective purchasers, such as restrictions or obligations imposed by the lease.

For example, cross lease properties often contain restrictions on building and alterations. Potential purchasers should be aware that they might not be able to extend the property if the lease specifies an existing footprint that cannot be altered. In addition, potential purchasers should be made aware of any improvements or alterations, (including any unauthorised structures) undertaken to a property to ensure that the property is fully compliant with the lease at the time of sale.

Company share title

If you search a title and find that the entire block of apartments (or flats) is owned by a company, you will be dealing with a ‘company share title’. This type of title may also be referred to as ‘company title’ or ‘company share scheme’. Some company share ownership can be on leasehold land.

The ownership structure is very different from other types of title that are common in New Zealand. The land and all buildings on the land are owned by a company. The company does not trade – it has been established for the sole purpose of owning the property. The company’s only shareholders are the people who occupy the individual dwellings or business units – these people gain their rights of occupancy by having equity in the company. They own shares in the company; they do not have title to their respective dwellings or business units. However, they may be granted a licence to occupy which will be registered on the title. The occupier’s rights and obligations will be defined within that document. In the absence of a licence to occupy, the occupier’s rights and obligations will be defined within the company’s constitution. The company’s constitution can be searched on the company register. There are exceptions, such as some retirement complexes where a licence to occupy may be offered without the granting of company shares.

Company share properties are subject to a set of rules of occupancy, which may include fees, levies, prohibition of tenants and restrictions on pets. It is necessary for a licensee to become thoroughly familiar with these documents before marketing such a property.

Co-ownership of land

There are two forms of co-ownership of land. These are as follows: • Joint tenancy • Tenancy in common

Joint tenancy

A joint tenancy exists when two or more people jointly own a property. Their names are recorded on the record of title with no mention of separate shares. For example, where a record of title records the proprietors as:John Doe and Jane Brown.

The effect of section 47 of the Land Transfer Act 2017 is that if two or more people are named in a transfer, they will be deemed to be joint tenants. The main features of joint tenancy are as follows:

• Each tenant has equal rights to possession of the land.
• Each tenant shares equally their joint interest in the land (there is no defined area of the shares of the land).
• Each joint interest has come from the same source (whether by purchase, will or gift).
• An important feature of joint tenancy is ‘the right of survivorship’. If one tenant dies, the surviving tenant/s own the whole estate. A joint tenant can only dispose of his or her interest during their lifetime. There is no facility for them to leave it to a third party in their will.
• Joint tenancy ownership may have been the intention at time of purchase, but during the ownership period, circumstances may change. If the joint tenants don’t take the necessary action to reflect those changes in ownership, this may create problems in terms of the parties’ rights and interests at the time of sale.

Trusts (a type of joint tenancy)

One common type of joint tenancy is a trust. Trusts are a means of protecting and managing assets by transferring property from individual ownership into that of the trust. The trust is managed by trustees on behalf of beneficiaries.

Family trusts are often used as a means of protecting assets from risk, such as the failure of a business or breakdown of a personal relationship. They also have effect in limiting tax liability.

Trusts are not legal persons in their own right, unlike limited liability companies. Unless the deed of trust specifies otherwise, it is essential to obtain the signatures of all trustees on agency agreement forms (listings), sale and purchase or lease agreements, and any other legally binding documents. Where one trustee wishes to sign on behalf of the other trustees, the licensee must obtain clear evidence of written authority. For example, authority as stated within the trust deed or a memorandum of resolution.

Tenancy in common

The second form of co-ownership is tenancy in common. While joint tenancy was previously the default co-ownership for domestic partners, it is now more common for domestic partners to purchase property as tenants in common to avoid potential problems. Under the terms of a tenancy in common, there is no right of survivorship. Each tenant is free to dispose of his or her interest as they see fit, whether through sale (transfer), provision of their will, or by gifting.

Under a tenancy in common, each person has a distinct share in the rights of ownership, but the land itself is not physically divided. Each tenant has a defined but undivided share. It may be proportioned equally, such as each tenant in common having a one-half or one-third share, or disproportionately, such as one person having a three-fifths share, and another having two-fifths.

A tenant in common may also hold separate title for his or her share, as is the situation in cross-lease and unit titles.

Elements on Records of title

The list below summarises the key elements found on a record of title (previously certificate of title).

Heading of the Record of Title

This indicates the register in which the title is held, e.g. Freehold (for fee simple), Leasehold, Stratum State

Identifier

This is the title’s unique reference, which identifies a specific parcel of land, and is the Computer Register (Title) reference.

Land Registration District

This shows which of the twelve land registration districts the property is located and where the record of title has been registered (North Auckland, South Auckland, Gisborne, Taranaki, Hawkes Bay, Wellington, Nelson, Marlborough, Westland, Canterbury, Otago, Southland).

Date issued

This is the date on which the current title was issued.

Prior References

This gives the Identifier/s of any earlier records of title from which this was developed, e.g. by way of subdivision.

Supplementary Record sheet

This only applies on stratum estate titles and alerts the reader to issues relating to all the units registered on the property.

Estate

This describes the type of estate, e.g. Freehold (fee simple). In cases of a cross lease title, there will be two sections showing the different elements of the estate.

Area

The land area, often expressed with “more or less”, meaning that there is allocation for a fraction of a square metre

Legal description

The Lot number and Deposited Plan number.

Registered Owners

The name/s of the current owners. Previously expressed as “Original proprietors” in an Historical Search Copy, with subsequent proprietors listed in the Interests section.

Interests

The list of any interests, encumbrances and restrictions registered on the title, such as mortgages, easements and caveats. In an Historical Search Copy, this will show all interests, encumbrances and restrictions, including those which have been subsequently extinguished. In a Search Copy, only current information will be shown.

Additional information

At the bottom of each page is a Transaction identification number, client reference, and the date on which the search copy was issued, including the number of pages of the record of title.