Mortgages | By Lawyers
Skip to main content

Mortgages

This publication guides practitioners in the preparation of loan agreements, mortgages, and guarantees.

1 Matter Plan

Overview

The commentary covers the drafting and execution of mortgages, amendments, variations, and assignment deeds, as well as completion, registration, discharge, and default, whether acting for the mortgagor or the mortgagee. 

The Reference materials folder includes guidance on electronic signing and remote witnessing, and the Getting the matter underway folder contains essential compliance and client engagement documents. The comprehensive Retainer Instructions ensure that all necessary information is gathered from the client at the outset of the matter.

Precedents in this publication include:

  • Library of loan documents, including:
    • Mortgage-linked loan agreement;
    • Mortgage memorandum;
    • No-security loan agreement;
    • Acknowledgements of debt;
    • Assignment, variation and priority;
    • guarantee;
    • minutes and declaration for a company mortgagor;
  • Letters and notices for default of the mortgagor.
Icon

1 Matter Plan Included

  • Item icon ALERTS - Nil
  • Item icon Full Commentary - Mortgages
  • Folder icon Reference materials
    • Item icon AI Prompts
    • Item icon Electronic Signing and Witnessing
    • Item icon Further information
  • Item icon Overview
    A mortgage is an instrument used to secure the payment of money owed by the borrower to the lender. Security can be taken, and a mortgage can be created over any form of property, but it is most common over real property. This guide deals with creating mortgages over land, but the same principles ...

    This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

  • Folder icon A. Getting the matter underway
    • Item icon File cover sheet - Mortgages
    • Item icon To do list - Mortgages
    • Item icon First steps
    • Item icon Client details and verifying identity
    • Folder icon Client authority and instruction form
      • Item icon Electronic land transactions
      • Item icon LINZ Authority and Identity Requirements for E-Dealing Standard 2018 – LINZS20018 – Land Information New Zealand
      • Item icon Certification of Electronic Instruments (Statutory Requirements and Retention of Evidence) Standard 2018 – LINZS20012 – Land Information New Zealand
      • Item icon Authority and instruction (A&I) from private individual client for an electronic transaction
      • Item icon Authority and instruction (A&I) from private corporate client for an electronic transaction
      • Item icon Authority and instruction (A&I) from public corporate client for an electronic transaction
    • Item icon Retainer instructions - Mortgages
    • Item icon Conflict of interest check
    • Item icon Initial letter to mortgagor with Client Care and Terms of Engagement
    • Item icon Initial letter to mortgagee with Client Care and Terms of Engagement and summary of loan terms
    • Item icon Summary of loan terms
    • Item icon Client Care and Terms of Engagement
    • Item icon Conveyancer Client Care and Terms of Engagement
    • Item icon Scope of work - Mortgages
    • Folder icon If required - Powers of Attorney for land
      • Item icon General power of attorney
      • Item icon Enduring power of attorney - property
      • Item icon Certificate of non-revocation and non-suspension of enduring power of attorney
      • Folder icon Library of clauses
        • Item icon Discharge of mortgage
        • Item icon Purchase of real property
        • Item icon Mortgage
        • Item icon Sale of real property
    • Item icon Time and costs estimates
    • Folder icon If required - Updating costs disclosure
      • Item icon Letter to client updating costs estimate
    • Folder icon General deeds, agreements, execution clauses and statutory declaration
      • Item icon Deeds and Agreements
      • Folder icon Deeds
        • Item icon Deed for general use
        • Item icon Deed of guarantee
        • Item icon Deed of release
        • Item icon Confidentiality deed
        • Item icon General deed of indemnity
        • Item icon Deed of assignment of agreement
        • Item icon Deed of gift
      • Folder icon Agreements
        • Item icon Agreement for general use
        • Item icon Heads of agreement
        • Item icon Non-disclosure agreement - Formal
        • Item icon Non-disclosure agreement - Informal
      • Folder icon Library of clauses for deeds and agreements
        • Item icon Amendment clause
        • Item icon Confidentiality clause for defined information - All parties
        • Item icon Confidentiality clause for defined information - One party
        • Item icon Confidentiality clause for terms of agreement - All parties
        • Item icon Confidentiality clause for terms of agreement - One party
        • Item icon Costs clause
        • Item icon Counterparts clause
        • Item icon Dispute resolution clause
        • Item icon Events beyond control clause
        • Item icon Governing law and jurisdiction clause
        • Item icon Interpretation clause
        • Item icon No assignment clause
        • Item icon Notices clause
        • Item icon Severance clause
        • Item icon Waiver clause
        • Item icon Whole agreement clause
      • Folder icon Execution clauses
        • Item icon Execution clauses - Agreements
        • Item icon Execution clauses - Deeds
      • Folder icon Statutory declaration
        • Item icon Statutory declaration
        • Item icon Standard annexure note for documents
  • Folder icon B. The mortgage
    • Item icon Types of mortgages
      There are 2 types of mortgages; legal and equitable.

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Equitable mortgage
      Once the parties execute a mortgage, it is binding and takes the form of a charge over the property as an equitable mortgage pending registration, if registration is agreed. Holders of such equitable or unregistered interests are recognised under the Land Transfer Act 2017 as owners of an equitable ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Statutory covenants
      Every mortgage over land contains the implied covenants, conditions, and powers set out in Part 1 of Schedule 2 of the Property Law Act 2007 to the extent relevant, and unless negatived, varied, or extended by the express terms of the instrument or a written memorandum accompanying it. ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Loan agreements and registered memorandum
      A loan agreement, separate to the mortgage instrument, usually sets out the principal amount, the rate of interest payable, and the repayment obligations. Loan agreements are contracts detailing the terms and conditions of a loan advanced by the lender to the borrower, including security to be ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Mortgage linked loan agreement
    • Item icon Mortgage Memorandum - By Lawyers - 2023 4368
    • Item icon No security loan agreement
    • Item icon Mortgagee’s requisitions
      A mortgagee can issue a list of requisitions as part of its due diligence in assessing the suitability of real property as security for a loan. The exact questions depend on the type of property, for example, unit title or rural property. For all types of property, the mortgagee requires a current ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Second and subsequent mortgages
      Any number of mortgages may be granted over a property. It depends on whether the mortgagees are satisfied that there is sufficient equity in the property to secure a further loan and whether the mortgagor has the capacity to repay them. When a mortgage is already registered on title, a subsequent ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Mortgages securing present and future advances
      A registered mortgage has priority over any subsequent mortgage secured against the property. This general rule is subject to a limitation which is often referred to as the rule against tacking. This rule prevents a first mortgagee from claiming priority of their mortgage over the property, with ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Priority limit
      A lender can designate a specific monetary sum within the mortgage known as the priority limit. This sum is intentionally set to be higher than the loan amount initially borrowed when the mortgage is established, normally 1.5 times the property value. Accepting the priority limit does not ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Indefeasibility of title
      The general rule under the Land Transfer Act 2017 is that once a dealing is registered, the person obtains a title to the estate or interest that cannot be set aside, and is free from estates and interests that are not registered or are incapable of being registered: s 51. This is commonly ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Joint borrowers – Forgery
      In a situation where one joint owner of a property forges the signature of the other joint owner on a mortgage instrument, and the document is registered, the lender's interest will be protected by indefeasibility. However, such indefeasibility does not extend to unregistered documents, for ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Registration
      Practitioners must lodge all land dealings with Land Information New Zealand (LINZ) via their online transaction centre, Landonline. An instrument need not be lodged as an electronic instrument if it is impracticable or inappropriate to do so. A power of attorney is not capable of electronic ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Mortgage instrument (all obligations)
    • Item icon Mortgage instrument (fixed sum)
    • Item icon Electronic lodgement
      Dealings can only be lodged electronically by a subscriber with a Landonline digital certificate. Practitioners must ensure:

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Requisitions and rejections
      Requisitions raised by LINZ about dealings lodged electronically are delivered to the email address associated with the account. Responses can be lodged by email. Landonline will send a requisition email containing copies of the current version of the electronic dealings lodged and stating the ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Personal property
      The Property Law Act 2007 defines property as everything capable of being owned. Personal property, known also as personalty, includes tangible property, for example, furniture, jewellery, and cars, and intangible property, for example, debts, copyrights, patents, and shares.

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Credit Contracts and Consumer Finance Act 2003
      The Credit Contracts and Consumer Finance Act 2003 regulates mortgages, credit cards, overdrafts, personal loans, goods purchased on credit, and other consumer credit contracts. To qualify as a consumer credit contract, the agreement must be entered into by a natural person, and the credit used, or ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Business purpose declaration
  • Folder icon C. Acting for the mortgagee
    • Item icon Letter to mortgagor's lawyer submitting documents
    • Item icon Acknowledgement of receipt of memorandum
    • Item icon Statutory declaration
    • Item icon Clause - For statutory declaration regarding mortgages, notices, and claims
    • Item icon Authority to complete documents and satisfy requisitions
    • Item icon Mortgagee's requisitions
    • Item icon Letter to mortgagor's lawyer advising ready for settlement
  • Folder icon D. Acting for the mortgagor
    • Item icon Letter to body corporate requesting pre-settlement disclosure statement
    • Item icon Letter to mortgagor to attend to sign mortgage
    • Item icon Letter to mortgagee's lawyer returning documents
    • Item icon Letter to discharging mortgagee requesting discharge
    • Item icon Direction to pay
    • Folder icon If required - Company mortgagor
      • Item icon Minutes of meeting of company mortgagor
      • Item icon Statutory declaration
      • Item icon Example content - Statutory declaration that company is solvent
  • Folder icon E. If required - Priorities, guarantees, and acknowledgements
    • Item icon Deed of priority
    • Item icon Deed of guarantee with explanation
    • Item icon Acknowledgement of debt - Simple
    • Item icon Acknowledgement of debt - Various situations
    • Item icon Acknowledgement of debt - Caveatable interest
  • Folder icon F. Discharge, assignment, variation and caveats
    • Item icon Discharge of mortgage
      Once the principal or secured sum has been repaid, a discharge of mortgage can be obtained from the mortgagee. This releases the property from the mortgage security. See s 83 of the Property Law Act 2007 and s 104 of the Land Transfer Act 2017. The estate or interest in the instrument ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Mortgage discharge instrument
    • Item icon Deed of forgiveness of debt
    • Item icon Assignment of mortgage
      A mortgagee can assign by instrument all the amounts and benefits of any other obligations secured by the mortgage, and all rights, powers, and remedies of the mortgagee under the mortgage, and the whole of the mortgagee’s interest in the mortgaged property to an assignee: s 84 of the Property ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Transfer instrument
    • Item icon Notice of transfer of mortgage
    • Item icon Deed of assignment of debt
    • Item icon Variation of mortgage
      The terms of a mortgage may be varied, and the variation may be registered: s 85 of the Property Law Act 2007. A form 19 – Mortgage Variation Instrument must be used to register a variation of:

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Deed of variation of mortgage
    • Item icon Mortgage variation instrument
    • Item icon Example content - Annexure to variation with omissions, variations and additions
    • Item icon Variation of priority of mortgages
      Under the Torrens system, registration gives priority. An instrument must be registered or noted according to the time it is lodged for registration: s 35 of the Land Transfer Act 2017. The first mortgage to be lodged and registered will take priority over subsequent mortgages. However, ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Mortgage priority instrument
    • Item icon Caveats
      The lodgement of a caveat serves a dual purpose:

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Withdrawal of caveat
      A caveator can withdraw a caveat for the whole or part of the estate or interest protected by the caveat: s 144. See form 35 – Withdrawal or Partial Withdrawal of Caveat, for the prescribed information.

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Withdrawal or partial withdrawal of caveat
  • Folder icon G. If required - Default
    • Item icon Mortgagee powers
      Under the Property Law Act 2017, the mortgagee has 2 main powers:

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Enter into possession
      If a mortgagor is in default and is still in possession of the property, a mortgagee can seek to enter possession of the property on the condition that they have complied with the restrictions on the exercise of their power under Subpart 5 of Part 3 of the Property Law Act 2007. These ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Letter to mortgagor with section 119 of the Property Law Act notice
    • Item icon Notice to mortgagor of mortgaged land of exercise of powers by reason of default
    • Item icon Power of sale
      Unless the default is remedied in compliance with the notice, the mortgagee can exercise their power of sale over the property. When exercising the power of sale, the mortgagee owes a duty of reasonable care to any current and former mortgagor, any covenantor, any subsequent mortgagee, and holder ...

      This excerpt is a preview of the full publication. You can Subscribe Now and gain immediate access to the complete publication.

    • Item icon Letter to former mortgagor, lower priority mortgagee, covenantor, or caveator attaching notice
  • Folder icon H. Finalising the matter
    • Folder icon If required - Unit title
      • Item icon Letter to body corporate with section 96 of the Unit Titles Act notice
    • Item icon Letter to mortgagor finalising the matter
    • Item icon Letter to mortgagee finalising the matter
    • Item icon Summary of loan terms
    • Item icon Letter to mortgagee advising loan repaid and mortgage discharged
    • Item icon Example invoice
    • Item icon Invoice recital - Mortgages
    • Item icon Closing the file
    • Item icon File closing checklist
  • Item icon Comments and suggestions for By Lawyers

Our Authors

A team of legal professionals contribute to By Lawyers' publications, all helping to ensure that content is updated regularly to reflect changes in legislation, practice, and procedure.

Meet Our Authors
Authors