Property – real and personal

Lecture 9
Helen Edwards
Reading for this lecture
 Readings for this lecture: chapter 9 (9.0 to 9.4)
Property and Ownership –
what is property?
 Property is everything that can be owned.
 The law is concerned with the rights and obligations
relating to property.
Two major subdivisions of
property
 Real property – land and things attached to land and interests in
land – characterised by immovability.
 It includes things permanently attached to the land, most things
growing on it and, with some restrictions, the air above and
ground below the surface.
 Personal property – every other kind of property – from a pin to
a Jumbo Jet to shares in a company or intellectual property
 Tangible property (that has a physical existence eg chattels and
land)
 Intangible property (choses in action and interest in it).
 Choses (French word) means “things”.
Real property
Personal property (tangible)
Personal property (intangible)
 Right to claim sums of money owed
 Cheques
 Insurance policies
 Shares
 Business goodwill
Rights of ownership
• Keep and use (possession)
• Transfer ownership by sale, gift, in a will, Trust, operation of law
• Use as security for a loan e.g. mortgage
• Give possession (not ownership) to another e.g. lease
• Grant contractual rights over e.g. licence (real property
example – retirement village houses, personal property example

• intellectual property)
  • Commit waste e.g. allow to fall into disrepair
  • Destroy
  Transfer of title (ownership)
  9
  Sale
  Gift
  By will or administration By operation of law
  No person can give better title than he/
  she has (indefeasibilty & nemo dat rule)
  10
  Bad title
  Bad title
  Registration of interest over
  real and personal property
   Real Property – Land Transfer Act 1952 &
  Property Law Act 2007
   Register interest over the land, eg ownership, mortgage,
  easement, caveats
   Personal Property – Personal Property
  Securities Act 1999
   Register Security Interest over a personal property
  Real property – ownership of
  land
   First principle is that the
  Crown owns all land
   Buyers purchase an
  estate in fee simple loosely
  referred to as ownership
  but in fact a right to use
  Types of ownership of land
  Individual
  Joint tenants –
  • co-owners own the whole of the property jointly
  • Right of survivorship
  Tenants in common
  • Two or more persons hold undivided shares in
  the same parcel of land
  • No right of survivorship
  Sale and Purchase of Land
   Agreement for sale and purchase
   e.g. Contract for sale of the house
   Settlement of the transaction
   Is the date and time when the exchange of money
  and house take place – all obligations have been
  performed and the contract is discharged
   Registration
   New owner’s name and relevant information is
  registered on the title
  Change of Ownership
   Transfer – ownership can be transferred from
  one owner to another through the land
  registries.
   Transmission – in this case the transfer of title
  occurs by operation of the law (automatic) e.g.
  • when an owner dies title is transferred to the executor
  named in the person’s will or to the administrator –
  Administration Act 1969.
  • When one joint tenant dies the land is transferred to the
  survivor
  Possession of land – estate in
  leasehold or life interest
   Estate in Leasehold is a right of
  exclusive possession given to
  another by the owner for a fixed
  term usually in return for money
   Life interest is a right to use and
  occupy land for the duration of the
  holder’s life
  Real property – registration of
  interest
   Easement – a right granted over land – driveways, drains etc
   Mortgage – Security for a loan to purchase land
   Joint family home – Creates a statutory joint tenancy
   Caveat – a person can register an existing right or
  interest in land.
  •Name of owner
  •Type of ownership
  •Measurements
  •Legal description
  •Mortgages
  •Transfers
  •Caveats
  •Consents
  •Easements
  •Leases
  New Zealand’s system of
  registering ownership of land
   Torrens system (from 1870) based
  on a system of Registries which
  registered and guaranteed title
   Land Transfer Act 1952 (repealed
  by Land Transfer Act 2017)
  amended by the Land Transfer
  (Computer Registers and
  Electronic Lodgement)
  Amendment Act 2002 – Land
  transfer transactions moved to a
  fully computerised system of
  registration
  Certificate of Title
  Every piece of land in New Zealand has a Certificate of Title (CT)
  These are now digitised and are stored and managed electronically
  by Land Information New Zealand (LINZ)
  A certificate of title contains the following information:
  • The title number
  • The number of any previous title
  • A description of the kind of estate for which the title is issued (e.g. fee simple or
  leasehold)
  • The area and a diagram of the land showing its boundary measurements
  • The legal description of the land
   when a large piece of land is subdivided a numbered plan is deposited with LINZ (the
  deposited plan) showing the division of the land into lots
   the lot number and plan number become the legal description for the new title – legal
  descriptions from earlier titles may also be included on the title
  • Details of any other interest in the land (memorials) – e.g. transfer, mortgage, lease,
  easement, fencing covenant, caveat – each has its own number and time and date of
  registration
  How it Works
  20
  Auckland/Northland
  •Land registry
  •Registrar
  How it works cont’d
  • The land registry is now totally electronic
  • The register is maintained by Land Information New
  Zealand (LINZ) http://www.linz.govt.nz/
  • All land dealings are registered electronically
  • Since 2008 the only way a copy of material from the
  land register may be obtained is:
   electronically through using an agent who has a licence to
  use the system
  or
   through an internet ordering system operated by LINZ
  Principles of the Land
  Transfer Act
   Mirror principle – Register accurately and completely
  mirrors the title (the legal interest in land – what has
  been agreed to in fact is documented in writing on
  the certificate of tile or other documentation)
   Curtain principle -No need to look beyond the
  “curtain” of the register for trusts and other interests
   Insurance principle -State compensates anyone who
  suffers loss because of defects in the system
  (If the mirror of the title (a) is an incorrect reflection of the factual position and
  (b) that results in a loss the loss will be met by the State.)
  Effect of registration
  Indefeasibility of title – Land Transfer
  Act 2017
  Registration:
   Gives and takes away title to land or interest in land
   Title and interest cannot be set aside (s 51)
   Title of owner is free from estates and interests that
  are not registered or noted (with exceptions ss52-56)
  Frazer v Walker [1967] All ER 649 (p574 in text book)
  Efstratiou, Glantschnig & Petrovic –v- Glantschnig (1972)
  (page 563 of textbook)
   NB: Read the case
  Maori Land
   Note that certain land is designated Maori land and is
  dealt with differently from general land not held by
  Maori.
  (Note many Maori also own land which is not designated
  Maori Land)
   This land is subject to the provisions of the Te Ture
  Whenua Maori Act 1993/ Maori Land Act 1993 and the
  jurisdiction of the Māori Land Court. The aim is to
  maintain the land in Māori ownership and to promote its
  effective use, management and development.
  Personal property – registration of
  security interest
   Personal Property Securities Act 1999
   Applies to personal property
   Two key concepts contained in the Act are Attachment and
  Perfection.
   Perfection generally means registration (though it can
  mean taking possession of the collateral).
   Registration gives priority to security interests
  Security interests under the
  PPSA
   A “security interest” under the PPSA is created by a
  transaction that in substance secures payment for
  performance of an obligation (s 19(1)(a))
   Loan creates a security interest – section 17
   Completion of the documentation or possession of the
  security creates an “attachment.” – section 40
   When personal property is subject to a security interest,
  the property is called “collateral”
  Attachment under the PPSA
   Sections 36 and 40 of the Personal Property Securities
  Act 1999 apply
   Attachment arises when a security agreement is signed
   Also arises when the secured party gives value and has
  rights in the collateral (eg the lender has possession of
  the collateral)
  Perfection under the PPSA
   Perfection is the process that determines
  priority among competing security
  interests
   Under s 41 of the Personal Property
  Securities Act, perfection occurs when the
  security interest has attached and either
   a financing statement has been registered, or
   the secured party is in possession of the
  collateral
  Personal Property Securities
  Act 1999
  • Registration “perfects” the interest.
   Gives priority over other lenders using the same item
  of property for security. If more than one registered
  interest priority is determined according to the date and
  time of “perfection”.
  • Priority of security interests in same collateral– section
  66 PPSA – see examples in the Act
  • Attached but unperfected (unregistered) security
  interest is still binding between the creditor and debtor
  to the security and those claiming under the debtor.
  What is the PPSA register?
   Section 139 of the Personal Property Securities Act 1999
   An electronic register
   Registration is effected by the registration of a
  financing statement — the data required to be entered
  into the register
   http://www.ppsr.govt.nz/cms
  What is the effect of
  registration under the PPSA
   Determines priority of security interests
   s 66 of the Personal Property Securities Act
  1999 sets out
  priority rules. In brief
   a perfected security interest prevails over an
  unperfected security
  interest
   the order of registration or possession
  determines priority between competing
  perfected interests
   priority between unperfected security interests
  is determined by
  order of attachment

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