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Dealing with landbrokers
Until the Lawyers and Conveyancers Act is implemented, the current landbroker regime will continue. It is recommended that practitioners adopt the following guidelines as best practice when dealing with landbrokers.
Practitioners should approach transactions as if the landbroker were a party acting in person. In particular:
- A practitioner should not accept an undertaking given by a landbroker.
- All settlements should take place in person or through an appointed agent. It would be extremely unwise for practitioners to effect a settlement on any other basis.
- Evidence of payment of rates and other outgoings should be required.
- When acting for a purchaser, the solicitor should check with the local authority that there are no arrears of water rates and that a water meter reading has been ordered. It may well be desirable to reach an arrangement that will safeguard payment - eg the retention by the solicitor of a sum estimated to cover the amount due, with appropriate accounting once the amount due is known.
- When acting for a purchaser, payment can be made by cheque payable directly to the vendor. If payment is requested to the landbroker or to any other party (eg mortgagee), a signed authority from the vendor should be obtained. The authority should be addressed to the purchaser and to the purchaser's solicitors.
- Registered landbrokers are able to sign documents correct, pursuant to s164 of the Land Transfer Act but they are not permitted, as of right, to take statutory declarations.
- The current edition of the Agreement for Sale and Purchase makes no provision for service of notices on landbrokers. See Clause 1.2 of the agreement.
- If a purchaser's mortgagee credits the account of a vendor's solicitor directly, care must be taken to ascertain precisely the terms on which payment has been made. In addition, the vendor's solicitor should take care that no duty to the purchaser's mortgagee is assumed.
Property Law Section Email Bulletin - E-dealing with a Landbroker - 17 January 2007
Queries regarding this issue may be directed to the Property Law Section Manager, PO Box 5041/DX SP20202, Wellington, tel (04) 915 1291, fax (04) 915 1283, email kim.oelofse@lawyers.org.nz.
Kim Oelofse
Property Law Section Manager
last updated 1 March 2007
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