New Zealand is about to become the first country in the world to have all of its land title registration and dealings registered on-line. From the 1st of July 2008, it will be compulsory for all land registrations to be completed online in a process known as e-dealing via the Land Information New Zealand’s (LINZ) Landonline system. The system is already being used successfully for selected conveyancing services.

It’s been a five year process to convert over seven million physical land registration records, some dating back over 150 years, into a digital library. Property lawyers are able to conduct title searches, transfers, discharges of mortgages and registration of new mortgages completely online. Guardian Trust staff lawyers are now set-up to complete e-dealing transactions on behalf of clients.

The online system offers significant improvements over the previous paper-based system, not least the implications for preventing mortgage fraud and identity theft. The e-dealing system requires clients to complete an Authority and Instruction (A&I) form that follows a rigorous identification process where photographic identification of the client must be verified by an independent witness.

Clients requesting Guardian Trust to act on their behalf for property transactions will require photo ID to accompany their A&I form for processing. New clients will also be required to provide a secondary form of ID that confirms their connection with the property, such as a rates notice or insurance company letter.

30 people implicated in mortgage fraud operation

A recent case of mortgage fraud that arose out of a police investigation called ‘Operation Allsorts’ uncovered a group of at least 30 people involved in various forms of mortgage fraud. One individual, a Mr McKelvy, was sentenced to eight years in prison for his part in the fraud, a sentence that was upheld by the Court of Appeal.

One of the methods used by mortgage fraudsters is an unauthorised impersonation of an individual property owner. With the previous paper-based system, it was relatively easy for claims of ownership to be made over a particular property. With few checks made, it was fairly straightforward for the fraudster to obtain money on security of a mortgage which was fraudulently signed and registered over someone else’s title. The victims would be unaware that their identity had been used to obtain money, their property offered as security or that a debt had been incurred in their name. When no repayments were made against the mortgage, the lending institution would then take action to enforce the debt, such as imposing the sale of the property.

Fortunately there are provisions in the Land Transfer Act which mean a fraudulently obtained mortgage is not enforceable. However, it is with reference to these cases and others like them that makes a secure, online system so important. Only those legally authorised to perform conveyancing services may be authenticated, registered users of the e-dealing system. The general public can carry out e-searches online at public counters but cannot e-deal.