NZLC PP16.Pdf
Total Page:16
File Type:pdf, Size:1020Kb
Preliminary paper No 16 THE PROPERTY LAW ACT 1952 A discussion paper The Law Commission welcomes your comments on this paper and seeks your response to the questions raised. These should be forwarded to: The Director, Law Commission, PO Box 2590, Wellington by Friday 1 November 1991 July 1991 Wellington, New Zealand ii The La.... Commission .... as established by the La .... Commission Act 1985 to promote the systematic revie .... , reform and deve16pment of the la.... of Ne .... Zealand. It is also to advise on ways in which the la.... can be made as understandable and accessible as practicable. The Commissioners are: Sir ~enneth ~eith ~BE - President The Hon Mr Justice Wallace Peter Blanchard The Director of the La.... Commission is Alison Quentin-Buter. The offices of the Law Commission are at Fletcher Challenge House, 87-91 The Terrace, Wellington. Telephone (04) 733-453. Postal address: PO Box 2590, Wellington, Ne .... Zealand. Use of submissions The La.... Commission' s processes are essentially public, and it is subject to the Official Information Act 1982. Thus copies of submissions made to the Commission will normally be made available on request, and the Commission may mention submissions in its reports. Any request for the withholding of information on the grounds of confidentiality or for any other reason will be determined in accordance with the Official Information Act. Preliminary PaperlLaw Commission Wellington 1991 ISSN 0113-2245 This preliminary paper may be cited as: NZLC PP16 iii SUMMARY OF CONTENTS Page Table of Statutes xiii Part A: Introduction I The Property Law Act 1952 3 Part B: General Rules Relating to Property II Formal requirements for execution of documents 17 III Creation and disposition of interests in land 27 IV Reform of general property rules 42 V Agreements for sale and purchase 55 VI Assignments of things in action 67 VII Voidable alienations 74 VIII Covenants 77 Part C: Mortgages IX Mortgages of land 83 X Mortgages of personal property 107 XI Mortgages of property generally 114 XII Sales by mortgagee through Registrar of High Court 125 iv Part D: Leases of Land XIII Covenants in leases 133 XIV Lessee's liability for negligently damaging premises 150 xv Subleases 161 XVI Restrictions on disposition or user of leased premises 165 XVII Breach of lease terms by lessee 170 XVIII Miscellaneous reforms to law of leases 183 XIX Long-term dwelling-house leases 190 Part E: Miscellaneous xx Easements, covenants, encroachments, landlocked land, trees and structures 201 XXI Marriage settlements 205 XXII Service of notices 208 XXIII Right to have insurance proceeds applied in reinstatement 212 Glossary 215 Bibliography 218 v Contents Page Para Table of Statutes siii A: INTRODUCTION I THE PROPERTY LAW ACT 1952 3 Nature and History of the Act 3 1 Deeds System Land 6 lS Relationship with Land Transfer Act 7 16 Movement of Rules 7 17 Other Deficiencies of the Act 8 20 Language 8 21 Mortgages 8 22 Leases 9 25 New Proposals 9 27 Imperial Statutes 10 29 Maori Land and CroWD Land 11 31 Terminology 12 36 Proposals 13 39 Acknowledgments 13 42 Outline of paper 13 43 B: GENERAL RULES RELATING TO PROPERTY 11 FORMAL REQUIREMENTS FOR EXECUTION OF DOCUMENTS 17 Deeds 17 Decline of importance 17 44 Use of deed 18 SO Limitation period 19 SS Possible reforms 19 56 Modifications to section 19 58 Wider reform " 20 59 Covenants 22 64 vi Ezecution by corporations 22 Section 5 22 65 Companies Bill 22 66 Public Bodies Contracts ~ct 23 70 English legislation 24 75 Proposal 25 78 Powers of attorney 26 81 III CRE~TION AND DISPOSITION OF INTERESTS IN LAND 27 83 Formalities for creation and disposition 27 84 Formalities for leases 28 89 "No registration" clauses 31 96 Requirement for a written contract 32 101 Criticisms of present law 32 102 Should writing be required? 34 107 The English reform 36 ll2 Remedies if contract not in writing 36 ll6 Ezceptions 39 122 Contracts of guarantee 40 124 IV REFORM OF GENERAL PROPERTY RULES 42 Replacement of Quia Emptores 42 126 General rules in Part II 43 133 Contingent remainders 44 139 Restriction on ezecutory limitations 45 144 Merqer 46 147 Itentcharqes 47 148 Human riqht. provisions 48 155 Property aqr.ements in de facto relationship. 49 159 Apportionments in respect of time 50 162 Division or sal. of co-owned property 51 167 Pr.scriptive riqhts 53 174 vii v AGREEMENTS FOR SALE AND PURCHASE 55 184 Vendors' liens 55 185 Riqht of purchaser in possession to relief after termination of aqreement 55 187 Recovery of purchaser's deposit where vendor is refused specific performance 57 195 Waiver of continqent condition 60 206 Mortqaqes by vendors of land 62 212 Subpurchases 63 215 Tender of payment by bank cheque 63 218 VI ASSIGNMENTS OF THINGS IN ACTION 67 226 Assiqnments within the section 68 230 Consideration 68 233 Execution by assiqnor's aqent 70 237 Notice to debtor 70 238 Harmonisation with reqistration statutes 71 243 VII VOIDABLE ALIENATIONS 74 Intent to defraud creditors 74 248 Intent to defraud purchaser 75 255 VIII COVENANTS 77 259 c: MORTGAGES IX MORTGAGES OF LAND 83 Forms of mortqaqes of land 83 266 Unreqistered mortqaqes of land - proposals for reform 84 269 Powers of mortqaqee of land 88 284 Restriction on exercise of mortqaqee's powers in relation to land 89 viii Notice to defaulting mortgagor 89 286 Notice to covenantors 90 289 Receivers 91 292 Form of notice 92 295 "Stale" notices 93 299 Draft sections 93 300 Mortgagee in possession of land 98 302 Leasing powers 98 303 Application of moneys 99 306 Accounting 99 307 Timber 100 308 Receiverships 100 309 Powe; to manage property and carry on business 101 310 Repairs 101 311 Withdrawal from possession 102 313 Provisions of Land Transfer Act 102 316 Power to adopt mortgagor's agreement for sale 104 320 Purchase of land subject to existing mortgage 105 321 x MORTGAGES OF PERSONAL PROPERTY 107 Foreclosure on equity of redemption in personal property 107 325 Possible advantages of foreclosure 107 327 Statutory foreclosure 108 330 Mortgages over goods: powers and restrictions 109 332 Mortgagee in possession of goods 110 336 A risection 92" provision for mortgages of goods 111 340 Notice to guarantor 112 344 Expiry of notice 112 345 XI MORTGAGES OF PROPERTY GENERALLY 114 Tacking of further advances to leqal mortqaqe 114 346 Contractual tackinq 115 352 Redemption and discharge of mortgages 119 366 Compensation for early repayment 119 367 ix Mortgagee required to transfer 121 370 Court order for sale 122 372 Provisions for consolidation and where mortgagee unable to be found 123 375 Discharge of mortgages 123 376 XII SALES BY MORTGAGEE THROUGH REGISTRAR OF HIGH COURT 125 Advantages of procedure 125 378 Should Registrar's sale be abolished? 126 381 Chattels 126 382 Redemption price 126 383 Date of application 128 387 Fixing of date of auction 128 388 Advertising 128 389 Reserve price 129 391 Withdrawing the property 129 392 0: LEASES OF LAND XIII COVENANTS IN LEASES 133 Implied covenants and powers 133 Common law covenants 133 394 Usual covenants 133 395 Covenants concerning condition of premises 133 396 Statutory covenants 134 399 Rates and tues 135 403 Quiet enjoyment and non-derogation 136 405 New implied covenants 136 406 Abatement of rent 136 407 Repair of premises 137 408 Lease covenants running with and against the reversion 138 411 Privity of estate: common law rules 138 412 Existing .tatutory provisions 139 419 Covenants concerning future property 141 425 Lea.es granted before 1906 141 426 Who may claim on covenant? 143 435 Severance of reversion 143 436 Implied covenants upon transfer or assignment of lease 144 439 x Continuing liability of assignor of lease 145 Lease as contract 145 441 Concurrent liability 145 443 English Law Reform proposal 146 447 New Zealand statutes 146 448 PLERC report 147 449 Problems with English proposal 147 450 XIV LESSEE'S LIABILITY FOR NEGLIGENTLY D~GING PREMISES 150 Effect of standard exclusion of risks 150 455 The economic reality 151 459 Caselaw 151 460 Residential tenancies 153 467 Proposal 153 467 Who should bear risk? 154 469 Subrogation: the position of landlord's insurer 154 471 Is subrogation relied upon? 156 474 Present position 158 480 A commonly used lease form 159 481 Suggested reform 159 482 xv SUBLEASES 161 Sublease for the same or longer term than the head lease 161 486 Head lessor's rights against sublessee after merger 163 494 XVI RESTRICTIONS ON DISPOSITION OR USER OF LEASED PREMISES 165 Disposi tion 165 501 User 167 510 XVII BREACH OF LEASE TERMS BY LESSEE 170 Termination for breach by 1e•• ee 170 520 Non-payment of rent 170 522 Other breaches by lessee 171 526 Notice to mortgagees 174 538 Methods of termination 174 539 xi Relief against termination 175 543 Cases of non-payment of rent 176 549 Joint tenants 177 550 Licences 177 551 No contracting out 177 552 Code 178 553 Prejudicing the landlord's title 178 554 Relief for sublessees 179 555 Relief against refusal to grant renewal etc 180 562 Time limit 181 564 XVIII MISCELLANEOUS REFORMS TO LAW OF LEASES 183 Distress for rent 183 566 Waste 184 Types of waste 184 570 Relationship of waste to lease covenants 184 571 Permissive waste 184 572 Voluntary waste 185 574 Equitable and ameliorating waste 185 577 No criminal liability 185 578 Liability for fire damage 185 579 Liability of co-owners for waste 186 580 Duration of term of lease: the requirement of certainty 187 581 Removal of fixtures by lessee 188 Characteristics of fixtures 188 588 Lapsing of right to remove fixtures 189 591 Agricultural fixtures 189 592 Proposals 190 594