Landonline issues – further updates

The Landonline system was developed to assist the settlement process for practitioners in New Zealand.  It was never intended to replace the longstanding settlement processes in general conveyancing practice. We have become accustomed to a system that allows instantaneous registration (in many cases) and one that readily provides up to date information. However, it is important to remember that this was not always the case and that this is a system that should be used in conjunction with standard conveyancing protocols (i.e. the exchange of undertakings).    

In addition to that, the intention of the New Zealand Law Society Property Law Section Guidelines is to provide ‘guidance’ but not to answer every question. It is acknowledged that the issues with the Landonline system in the past two days have presented issues, but it is a timely reminder for practitioners to be conscious of the steps within the settlement process.  The fact that instantaneous registration is not available does not necessarily stop settlement from being completed.  Practitioners should be collegial with each other, and where possible utilise undertakings to address any current issues with the signing and certifying process and/or registration within Landonline.  The following examples are provided as guidance, but practitioners should address each transaction on a case-by-case basis: 

1. Where both parties have signed and certified but release and registration is not possible: 

• Parties should consider providing undertakings whereby they formally notify each other of the issue, and they undertake to take all available steps to effect the release of instruments as soon as Landonline is available again.   

2. Where only one party has signed and certified: 

• The party that has not signed and certified should undertake to sign and certify and release the instrument (where appropriate) as soon as Landonline is available again.  

3. Where neither party has signed and certified: 

• Both parties will need to consider whether they have sufficient information to provide the necessary undertakings and then undertake to do what is necessary as soon as Landonline is available again and in line with the above steps. 

The disbursement of funds will need to be considered by the parties at that time and considered in conjunction with what other undertakings have been provided to third parties as well (i.e. banks, on purchase).  Normally on settlement and possession being given it would not be normal for funds to be held by the Vendor. However, each individual case requires us as practitioners to consider how best to protect our client.  Engaging with your client and their bank to establish what you are authorised to do will be very important.  

The modification of undertakings should not be taken lightly.  Practitioners should always ensure they can comply with any undertakings before they are provided.  We need to be practical and tailor our undertakings as best possible.  We often need to communicate with third parties (i.e. banks) and obtain agreement to what is being proposed in our settlement.  We are aware of situations within mainstream banks yesterday whereby they were comfortable in specific circumstances with funds being disbursed notwithstanding their mortgage could not be registered, yet.  We need to remind ourselves that prior to the instantaneous registration system settlements took place, and still can where appropriate undertakings are able to be given.