Consents – mortgagee
This article explains which instruments require mortgagee/encumbrancee consents, as well as why consents are required.
Why are consents required?
In various legislation, there is a legal requirement for the consent of the mortgagee/ chargeholder/caveator etc to the registration of instruments. LINZ is required to ensure compliance with these legal requirements.
Consents are required to ensure that an existing interest holder (eg mortgagee, chargeholder or caveator etc):
- is aware of any transaction that may affect their interest
- is not disadvantaged by a transaction (eg variation of mortgage increasing the priority amount of a prior mortgage) without their knowledge and consent, and
- has agreed to any change to the title that may affect their interest (eg creation or surrender of an easement).
Certifications
The practitioner certifying and signing an instrument must ensure they hold the appropriate consent (if applicable). Before they complete a certification, they must ascertain if a consent is required and ensure the consent has been received.
If a lodged instrument does not display the certification but the consent is required as listed in one of the tables below, the consent should be attached as an image to the instrument.
Which instruments require mortgagee/encumbrancee consents?
The following instruments require mortgagee/encumbrancee consents as specified in the stated statutory provision:
| Type | Instrument description | Statutory provision |
|---|---|---|
| AP17 | Application for Record of Title ss155, 172, or 204 LTA 2017 | Section 172(5) and (8) |
| C132 | Cancellation/Revocation/Rescission of Licence to Occupy | Sections 131(2) and 132(1) |
| E | Grant of Easement Without Transfer | Section 109(3) |
| EI | Easement Instrument | Section 109(3) |
| HCEC | Housing Corporation Easement Certificate | Section 26(2)(a) Housing Act 1955 - applies only if there is a pipeline easement |
| L | Lease | Section 91(4) |
| MP | Memorandum of Priority | Section 102(6) |
| OL | Licence to Occupy | Sections 124(1) and 91(4) |
| PDPL | Partial Surrender of Deferred Payment Licence | Section 127(1) Land Act 1948 |
| PP | Profit à Prendre | Section 109(3) |
| PSE | Partial Surrender of Easement | Section 109(4) |
| PSL | Partial Surrender of Lease | Section 94(4) |
| SDPL | Surrender of Deferred Payment Licence | Section 127(1) Land Act 1948 |
| SE | Surrender of Easement without Transfer | Section 109(4) |
| SL | Surrender of Lease/Licence | Section 94(4) |
| SOL | Surrender of Licence to Occupy | Sections 130 and 131 |
| SPP | Surrender of Profit à Prendre | Section 109(4) |
| TE | Transfer and Grant of Easement | Section 109(3) |
| TSE | Transfer and Surrender of Easement | Section 109(3) |
| UAPP | Application for Deposit of Unit Title Plan | Section 32(1)(d) Unit Titles Act 2010 |
| VE | Variation of Easement | Section 112(4) |
| VENC | Variation of Encumbrance | Section 101(4) and (6) |
| VFL | Variation of Licence under Crown Forest Assets Act 1989 | Section 31 Crown Forest Assets Act 1989 - optional but not binding if mortgagee hasn’t consented |
| VL | Variation of Lease | Section 93 |
| VM | Variation of Mortgage | Section 101 |
| VPP | Variation of Profit à Prendre | Section 112(4) |
*Statutory provisions relate to the Land Transfer Act 2017 unless specified otherwise
Notes:
- AP17 can be used for an Application to Record of Title under sections 155, 172 or 204 Land Transfer Act 2017. The mortgagee consent requirement applies only to applications made under section 172 and 204 (if applicable).
- EI (Easement Instrument) can be used to create easements and profits à prendre.
- If a plan of subdivision has a lot to vest, before the plan can be deposited and the lot vested, the consent of the mortgagee is required (sections 224b)(ii), 238 and 239 Resource Management Act 1991) unless the mortgage is discharged as to the lot to vest.
- A Transfer of a Licence to Occupy, requires the consent of the mortgagees of the Licence to Occupy - sec 130(2) Land Transfer Act 2017.
- A discharge of the head mortgage or a transfer for the purpose of exercising a power of sale under the head mortgage cannot be registered if it is subject to a submortgage – sections 104(4) and 103(3) Land Transfer Act 2017.
- A Forest Sink Covenant (COV), a Variation of forest sink covenant (VCOV) and a Cancellation/Revocation of a forest sink covenant (RCOV) requires the consent of the mortgagee - Sec 67ZA Forests Act 1949.
Variation of mortgage / memorandum of priority
For a Mortgage variation instrument, the following consents must be obtained:
- consent of a subsequent mortgagee (unless the variation only reduces the amount secured or the stated priority limit or the rate of interest) - see s101(4) LTA 2017; and
- consent of a submortgagee – see s101(6) LTA 2017.
For a Mortgage priority instrument (memorandum of priority):
- authority must be obtained from all mortgagees whose priority is affected by registration of the instrument (including those gaining priority); and
- consent of a submortgagee must be obtained (where the head mortgagee is losing priority) - see s102(6) LTA 2017.