E-dealing compliance trends – the good, the bad and the avoidable

Information about recent compliance trends and some tips on how to get it right first time and avoid unnecessary rework.

High level of compliance with e-dealing requirements

Compliance review trends show there is a high level of compliance with e-dealing requirements, with 91% of practitioners reviewed in the last 6 months issued with a compliance certificate. While this is a good result overall, there is room for improvement in some areas.

Qualified or non-compliance outcomes were issued in a minority of cases where practitioners did not produce sufficient evidence for their certifications. A range of issues were identified in these cases:

  • client authorities had not been obtained or properly documented
  • the parties were not legal entities capable of holding land (requiring ownership to be rectified) 
  • name discrepancies had not been reconciled, and
  • photo ID had not been obtained or was not a reliable form of ID.

Further information and guidance on how practitioners can meet their certification obligations in relation to these matters can be found at Authority to lodge e-dealings and Proof of identity for e-dealings.

Evidence sometimes omitted from response

When responding to compliance review requests, practitioners can sometimes fail to produce all the necessary supporting evidence in the first instance due to simple oversight.  The most common documents omitted were A&I forms, photo IDs, mortgagee letters of instruction, file notes relating to high-risk transactions, and ANZ SOLD emails (ANZ’s covering email, issued via their SOLD email system, which evidences ANZ’s authority for a discharge or new mortgage).

A&I forms and mortgagee letters of instruction are most often omitted by practitioners in the following situations:

  • when acting for both the vendor and purchaser - the A&I form from only one of the parties is returned
  • when acting for the vendor - the vendor A&I form is returned but not the mortgagee’s letter of instruction authorising the discharge of mortgage, and
  • when acting for the purchaser - the purchaser A&I form is returned but not the mortgagee’s letter of instruction authorising the new mortgage.

Name discrepancies must be reconciled

Practitioners sometimes also omit to obtain the necessary statutory declaration to reconcile name discrepancies. This typically occurs when a practitioner is acting for a client they know well and they don’t always turn their mind to the verification of identity and evidentiary requirements. 

Where the owner’s name, as recorded on the record of title, differs from that recorded in their photo ID, evidence of the person’s name change must be produced (for example, a copy of the owner’s certificate of marriage, civil union or name change). In other situations, including where there is a spelling error in the register or photo ID, practitioners must obtain a statutory declaration from the client that explains the reason for the discrepancy and confirms that they are one and the same person.

Getting it right first time - how to avoid unnecessary rework and follow-up activity

It’s worth noting that the compliance issues highlighted in this article occur mostly in connection with simple residential conveyancing transactions, transmissions, or correction of name applications. Such difficulties can easily be avoided with some care and attention on the basics.

The compliance review request we send out to practitioners specifies each instrument that is selected for review. If you are unsure what evidence you need to produce, our guidance on statutory and evidentiary requirements provides the relevant details for each instrument.

Statutory and evidentiary requirements

If you need to check what certifications you gave, a copy of the Landonline ‘View Instrument Details’ for each instrument will show who you acted for (including whether you acted for both sides of the transaction) and whether you certified that you hold consent from an interested party (e.g. a caveator or mortgagee). 

A careful review of your client file (including any e-dealing checklist or A&I forms) may indicate whether you need to include additional evidence in your response such as, for example, connecting documents and file notes relating to client identity verification for high-risk transactions, evidence reconciling name discrepancies, or file notes explaining the use of  a delegate witness (see our website for further guidance on these matters: in particular, sections 4.2, 4.4, and 4.6 of the Authority and Identity Requirements for E-Dealing Guideline 2018).

Authority and Identity Requirements for E-Dealing Guideline 2018 - LINZG 20775

It's also good practice to review your compliance review response and check that you have all the relevant supporting documents for each instrument specified in the request before sending it us.  Having a colleague peer review your response is another good option. A little time spent up front can help ensure your compliance review response is complete in the first instance and avoid the need for time consuming follow-up activity.

You may also wish to revise your firm’s file management procedures by having supporting documents which may be needed for compliance review purposes tagged to make them easier to identify on file if the dealing is selected for review.

Land transfer tax statements not needed for compliance reviews

While practitioners must retain their client’s signed tax statements for 10 years so they can be produced if requested by Inland Revenue (see section 84(1) Land Transfer Act 2017), they are not required to be produced for our compliance review purposes. 

In addition, for privacy reasons, tax information should not be recorded on client A&I forms or other evidence that may be produced for compliance review purposes, or included in an instrument lodged for registration.

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