While the New Zealand Law Society (NZLS) backs the upcoming modernisation of the Land Transfer Act 1952, it has also said that some of the proposed provisions require an explanation.
On Wednesday (25 May), the Society expressed its concerns about two clauses which allow the High Court to alter the land title register in cases of manifest injustice.
“These clauses create a very wide field within which the High Court may operate to alter the land title register. This in turn has the potential for profound impact on banks and other lenders, who lend money on the security of land,” Ian Haynes, spokesperson for the NZLS said.
Duncan Terris, chair of the Society’s Property Law Section, said that a proposed compensation clause within the amended Act would mean someone deprived of their interest in land would find it harder to seek compensation from the Crown.
“This right has always existed, but the proposed clause suggests that a person needs to invest time and money into litigation before they can seek compensation and this could make access to compensation more difficult.
“The clause needs to be redrafted to make it very clear that a person may apply for compensation immediately.”
Additionally under the new bill, compensation will be assessed using the land’s market value. The NZLS has warned that this may be unfair to the person receiving compensation. Instead, the land’s value should be calculated by looking at what has been lost from the claimant’s perspective.
Terris added that these changes would present certain difficulties to property lawyers.
“It would certainly create challenges and yet again more considerations to take into account, the advice you can give to a client” he said.
“Also the banks already impose significant responsibility back on the lawyers for any loss, so there is also potential there for a greater liability and responsibility being imposed on lawyers by banks.”