Caveator’s consent certification where prior withdrawal of caveat is to be lodged

This article provides guidance for conveyancing practitioners when dealing with caveator consent requirements for e-dealings.

Caveator’s consent certification 

In circumstances where a transaction affects a title subject to a caveat, and the consent of the caveator has been obtained to enable registration, the e-dealing system allows the conveyancing practitioner to make a certification to that effect. The certification is displayed automatically and must be completed in order to allow registration.

If, on the other hand, a prior withdrawal of the caveat is prepared as part of the same e-dealing the system recognises this and will not display the caveator’s consent certification.    

The same applies, of course, to notices of claim, which have the same effect as a caveat. 

Issue with prior withdrawals when lodged separately  

Difficulties may arise, however, in a minority of cases where there are back-to-back transactions and the withdrawal forms part of a separate prior dealing. In these circumstances, the system does not recognise the prior withdrawal and consequently the caveator’s consent certification, though redundant, will still be displayed as a requirement for certification and registration of the later dealing. Understandably, this can be something of an inconvenience and a source of frustration for practitioners.

Proposed enhancement

LINZ recognises this is an important issue that needs to be addressed in future system enhancements. A solution has been identified that will overcome these difficulties and ensure the caveator’s consent certification is not displayed where a prior withdrawal is to be lodged. Unfortunately, due to commitments already made for the implementation of upcoming system releases, LINZ will not have an opportunity to implement this enhancement until late 2008.

Interim solution

In the meantime, it will be necessary to adopt some interim measures to overcome these issues:

  1. One obvious option is to liaise with the lawyers for the parties involved and make arrangements for the caveat withdrawal to be prepared as part of the e-dealing requiring consent. This would prevent the caveator’s consent certification from displaying. Another option would be to wait until the prior dealing containing the withdrawal is registered, thereby eliminating the issue.
  2. Also, from late March 2008, Release 3.0 will allow multiple transfers and mortgages in the same dealing. Accordingly, back-to-back dealings that involve caveats may be combined into one dealing which will prevent the caveator’s consent certification from displaying once the withdrawal has been prepared.
  3. Of course, it may be that the nature of the transaction is such that the withdrawal must be lodged as part of a prior dealing and settlement of the later dealing cannot wait until registration is completed. In such a case, the practitioner acting in respect of the later dealing will have no choice but to make the caveator’s consent certification to enable the transaction to proceed.

In these circumstances, it will be necessary for both LINZ and practitioners to take a common sense view of these matters. For regulatory purposes, one could argue that in this limited context ‘consent’ can be taken to have a wider meaning than would otherwise be the case so as to encompass the lodgement of a prior withdrawal. In any case, once the prior withdrawal has been registered, the consent certification is clearly a nullity.   

Accordingly, the Registrar-General of Land accepts that a pragmatic approach must be taken and has confirmed that there will be no compliance implications for practitioners who make a caveator’s consent certification in such cases.

It should be noted, however, that apart from this limited set of circumstances, the requirements relating to caveator’s consent are absolute and no such certification may be made unless a valid consent has been obtained and is held.