Property Law Act 2007

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Reprint as at 6 August 2010

Property Law Act 2007

Public Act2007 No 91
Date of assent4 October 2007
Commencementsee section 2


Changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in this reprint.

A general outline of these changes is set out in the notes at the end of this reprint, together with other explanatory material about this reprint.

This Act is administered by the Ministry of Justice.


1 Title

2 Commencement

Part 1
Preliminary provisions

3 Purpose

4 Interpretation

5 Meaning of certain references

6 Attorney or agent may act

7 Act binds the Crown

8 Application

Part 2
General rules relating to dispositions, instruments, transactions, and property

Subpart 1Deeds, powers of appointment, disclaimers, and powers of attorney

9 Deed must be in writing, executed, and delivered

10 When deed comes into force

11 Alterations after deed executed

12 Attorney executing deed

13 Contracts and other obligations entered into by bodies corporate

14 Construction of supplementary or annexed deed

15 Receipt for consideration in body of deed

16 Powers of appointment

17 Disclaimer of land

18 Specific performance of voluntary promises made by deed

19 Powers of attorney

20 Power of attorney continues in force until notice of revocation received

21 Irrevocable powers of attorney

22 Person between 18 and 20 years may do certain things

23 Construction of instruments

Subpart 2Writing required in certain cases

24 Contracts for disposition of land not enforceable unless in writing

25 Writing required for certain dispositions of interests in land

26 Doctrine of part performance not affected

27 Contracts of guarantee must be in writing

Subpart 3Sales and other similar transactions

Sale and purchase of land

28 Restriction on vendor’s right to cancel agreement, etc, if purchaser in possession

29 Requirements for vendor’s notice to purchaser

30 Defects that do not invalidate vendor’s notice or prevent purchaser offering reasonable compensation

31 Section 28 does not prevent or limit claims for damages

32 Instruments have no effect so far as they conflict with section 28, 29, 30, or 31

33 Relief against cancellation of agreement for sale of land

34 Section 33 replaces all other jurisdiction to grant relief

35 Application for relief not to constitute admission

36 Instruments have no effect so far as they conflict with section 33 or 34

37 Purchaser may apply for order requiring refund of deposit, etc, in respect of certain agreements

38 Court awarding damages against purchaser must take into account relief granted under section 37

39 Agreements have no effect so far as they conflict with section 37 or 38

40 Purchaser of lease must treat lease conditions as having been observed if vendor produces copy of rent receipt

41 Vendor must ensure register not limited as to title (whether or not register is also limited as to parcels)

Miscellaneous provisions

42 Auction sales of property other than goods

43 Later title not invalid because of defect in court order

44 Certain instruments authorise payment to practitioner instead of party for whom practitioner acts

Subpart 4Apportionment of periodical payments between vendors and purchasers

45 Apportionments in respect of time

46 Payment and recovery of apportioned part of periodical payment

47 Apportionment of rent from property

Subpart 5Assignment of things in action

48 Interpretation

49 Application of subpart

50 How thing in action assigned

51 Further consequences of assignment of thing in action

52 Further provisions about assignments

53 Assignment of amounts payable in future

Subpart 6Other transactions

54 Effect of no registration clause

55 Tenants in common may declare that they are joint tenants

56 Person may dispose of property to himself, herself, or itself

Subpart 7Abolition and modification of common law rules relating to property

57 Feudal incidents of estate in fee simple abolished

58 Abolition of obsolete estates and rules

59 Future estates and interests

60 Doctrine of interesse termini abolished

61 Life estate in leasehold estate

62 Creation and disposition of estates and interests in property

63 Contingent remainders and interests

64 When gifts over cease to be capable of taking effect

65 Meaning of heirs and similar words

66 Future interests to carry accumulated income

67 Vendor has no lien

68 Voluntary waste or equitable waste by life tenant or lessee

69 Voluntary or equitable waste by co-owner

70 Permissive waste abolished

71 Release of part of land from rentcharge

72 Body corporate may hold property as joint tenant

73 Release and disclaimer of powers

74 Power to appoint among different objects

Part 3

Subpart 1General provisions

75 Application of Part

76 Application of sections 79, 92, 94, 95, and 96

77 Non-application of Part to security interests in consumer goods

78 Provisions of Part are supplementary, but subject, to Personal Property Securities Act 1999 in relation to mortgages over personal property

Subpart 2Form and effect of mortgages

79 Mortgage over land to take effect as charge

80 No mortgage over land by deposit of instruments of title

81 Right of mortgagor to bring proceeding against mortgagee

82 Effect of advance on joint account

Discharge, assignment, and variation of mortgages

83 Discharge of mortgage

84 Assignment of mortgage

85 Variation of mortgage

86 Effect of mortgage variation instrument

Advances for protection and realisation of security

87 Mortgage secures advances for protection and realisation of security

88 Priority extends to advances for protection and realisation of security

Priority for further advances

89 Priority of security for advances after subsequent mortgage comes into operation

90 Advance of specified principal amount after subsequent mortgage

91 Priority extends to further advances if mortgagee does not have actual notice of subsequent mortgage or is obliged to make further advances

92 Priority extends to further advances up to stated priority limit

93 Interpretation for purposes of sections 91 and 92

94 Transitional provisions for further advances

Subpart 3Covenants, conditions, and powers implied in mortgages

95 Covenants implied in mortgages over land

96 Covenants implied in mortgages over goods (except inventory)

Subpart 4Redemption of mortgages

97 Equity of redemption

98 Amounts secured include interest for unexpired portion of term

99 Mortgagor or other person seeking to redeem must give notice or pay interest in certain circumstances

100 Requirement to pay interest subject to credit contract legislation

101 Terms in instrument of no effect if less favourable

102 Request to mortgagee to transfer mortgage

103 Mortgagee must transfer mortgage after receiving request

104 Right to inspect instruments of title

105 Restriction on consolidation

106 Instruments have no effect so far as they conflict with section 102, 103, 104, or 105

107 Application for order of court directing sale of mortgaged property

108 Court may make order directing sale of mortgaged property

109 Redemption when mortgagee cannot be found, etc

110 Redemption by order of court

111 Certificates and orders operate as discharge of mortgage

112 Redemption by payment to Public Trust

113 Instruments of title must be delivered on production of Public Trust’s receipt or certificate

114 Public Trust not liable if acts reasonably and in good faith

115 Court may order discharge of mortgage if periodical payments secured are otherwise provided for

116 Certificate operates as discharge of mortgage

Subpart 5Restrictions on exercise of mortgagees’ powers

117 Foreclosure abolished

118 Mortgagee accepting interest after expiry of term not to call up without notice

119 Notice must be given to current mortgagor of mortgaged land of exercise of powers, etc

120 Form of notice under section 119

121 Copy of notice under section 119 must be served on former mortgagor, covenantor, subsequent mortgagee, and caveator

122 Notice of intention to recover deficiency in relation to mortgages over land

123 Instruments have no effect so far as they conflict with section 119, 120, 121, or 122

124 Conditional sale of land permitted before expiry of notice

125 Notice not required before exercising certain powers under mortgage debenture

126 Court may grant leave to enter into possession of land, etc

127 Transitional provisions for notices given or served before commencement of Act

128 Notice must be given to current mortgagor of mortgaged goods of exercise of powers

129 Form of notice under section 128(1)

130 Copy of notice under section 128 must be served on former mortgagor, covenantor, and subsequent mortgagee

131 Instruments have no effect so far as they conflict with section 128, 129, or 130

132 Notice of intention to recover deficiency in relation to mortgages over goods

133 Instruments have no effect so far as they conflict with section 132

134 Conditional sale of goods permitted before expiry of notice

135 Notice concerning goods not required in certain cases

136 Court may grant leave to exercise power of sale of goods or to claim deficiency

Subpart 6Mortgagees in possession

Entry into possession

137 Exercise of power to enter into possession

138 Mortgagee may not enter into or take physical possession if mortgagee has consented to lease

139 When mortgagee becomes mortgagee in possession

140 Mortgagees in possession of accounts receivable

Powers and obligations of mortgagees in possession

141 Mortgagee in possession of leasehold estate or interest in land or of leased goods

142 Mortgagee in possession of land may enter into lease

143 Terms and conditions of lease entered into by mortgagee in possession

144 Extent to which lease of land entered into by mortgagee in possession is binding on certain persons

145 Mortgagee in possession may enter into lease of mortgaged land together with other land

146 Registrar-General or other person need not inquire whether occasion has arisen authorising mortgagee to enter into lease

147 Mortgagee in possession of land may exercise powers under lease

148 Mortgagee in possession may manage land, goods, or accounts receivable

149 Mortgagee in possession of land may harvest crops and timber

150 Mortgagee in possession may protect or repair mortgaged land or goods

151 Mortgagee in possession of land liable for waste

152 Application of income received by mortgagee in possession

153 Preferential claims

154 Transitional provisions relating to preferential claims

155 Mortgagee in possession to account to current mortgagor

156 Notice of entry into possession of mortgaged land or goods

157 Address to which notice to current mortgagor must be sent

158 Public notice

159 Current mortgagor to make information available and give reasonable assistance to mortgagee in possession

160 Accounting records

161 Mortgagee in possession must keep money relating to land, goods, or accounts receivable separate from other money

162 First report by mortgagee in possession

163 Further reports by mortgagee in possession

164 Extension of time for preparing reports

165 Persons entitled to receive reports

166 Persons entitled to inspect reports

167 Duty to notify breaches of other Acts

Withdrawal from possession

168 Withdrawal of mortgagee from possession

169 Mortgagee who has withdrawn from possession not entitled to receive income after withdrawal

170 Withdrawal with consent of court

171 Withdrawal by direction of court

172 Restriction on re-entry into possession after withdrawal

173 Notice that mortgagee has withdrawn from possession

Protection for directors

174 Defences available to directors in proceedings for offences under this subpart

Application of various provisions to mortgagees who entered into possession before 1 January 2008

175 Application of various provisions to mortgagees who entered into possession before commencement of Act

Subpart 7Mortgagees’ power of sale

Exercise of power of sale

176 Duty of mortgagee exercising power of sale

177 No defence or indemnity

178 Powers incidental to power of sale

179 Mortgagee may adopt agreement for sale and purchase

180 Court may authorise land and minerals to be dealt with separately

181 Powers incidental to power to sell land, mines, or minerals

182 Sale together with other property at single price

183 Mortgagee may transfer or assign mortgaged property to purchaser

184 Protection of purchaser at sale by mortgagee

185 Application of proceeds of sale of mortgaged property

186 Payment of surplus to the Crown if current mortgagor cannot be found

Sale by mortgagee through Registrar or through court

187 Sale by mortgagee through Registrar

188 Application for sale under section 187

189 Vendor mortgagee must nominate discharge sum

190 Registrar to arrange sale

191 Advertising of sale

192 Registrar may consent to correction of defect or error

193 Withdrawal of land from sale

194 Registrar’s fees, expenses, and commission

195 Current mortgagor or other person may redeem on payment of nominated discharge sum

196 Mortgagee may purchase at sale through Registrar

197 Effect of transfer executed or registered under section 196

198 Registration of transfer instrument

199 Applications for sale of mortgaged land by Registrar made before commencement of Act

200 Sale by mortgagee through court

201 Application for assistance must be served on certain persons

202 Miscellaneous matters concerning orders under section 200

Subpart 8Liability to mortgagee of person who accepts transfer, assignment, or transmission of land subject to mortgage

203 Person who accepts transfer, assignment, or transmission of land personally liable to mortgagee

204 Liability of former mortgagor not extinguished

205 Administrator or trustee liable only to extent of assets of estate or trust

Part 4
Leases of land

Subpart 1General provisions

206 Application of Part

207 Interpretation

Subpart 2Form, duration, and effect of leases

208 Short-term lease: form

209 Short-term lease: effect

210 Implied term of lease if no other term agreed

211 Obligations of lessee to remain in force if lessee remains in possession of land with lessor’s consent after term of lease has expired

212 Lease terminating on occurrence of future event

213 Lessee remaining in possession without consent of lessor, or lessor accepting rent, after termination of lease

214 Notice by joint tenants

215 Sublease for same or longer term as term of superior lease

216 Surrender of lease to enable new superior lease to be entered into not to affect sublease

Subpart 3Covenants, conditions, and powers implied in leases

217 Application of sections 218 to 220

218 Covenants, conditions, and powers implied in all leases

219 Covenant implied in leases (except unregistered short-term leases)

220 Covenant implied in unregistered short-term leases

221 Reference to usual covenants

222 Time for payment of rent

223 Effect of covenant to keep premises in good condition

224 Consent not to be unreasonably withheld or delayed

225 Application of sections 226 to 228

226 Consent to assignment, etc, or change of use

227 When consent is unreasonably withheld

228 Damages may be recovered from lessor if consent is unreasonably withheld

229 Instruments have no effect so far as they conflict with section 225, 226, 227, or 228

Subpart 4Effect on leases of transactions concerning reversion

230 Merger of reversion not to affect remedies

231 Burden of lessor’s covenants to run with reversion

232 Rights under lease to which section 233 applies

233 Benefit of lessee’s covenants to run with reversion

234 When rights arising from covenants may be exercised

235 Rights and obligations under lease after severance

236 Notice of termination of lease after severance

237 Effect of payment by lessee to assignor of reversion

238 Effect of acknowledgement by lessee of another person as lessor

Subpart 5Effect of transfer or assignment of leases

239 Application of subpart

240 Transferee or assignee becomes lessee

241 Transferor or assignor remains liable

242 Covenant implied in transfer or assignment of lease

Subpart 6Remedies and relief

Cancellation of leases

243 Sections 244 to 264 to be code

244 Cancellation of lease for breach of covenant or condition: general

245 Cancellation of lease for breach of covenant to pay rent

246 Cancellation of lease for breach of other covenants

247 Defects that do not invalidate notice of intention to cancel lease

248 Application to court for possession of land made before expiry of period of notice of intention to cancel lease

249 Consequences of serving on lessee notice of intention to cancel lease under section 245 or 246

250 Acceptance of rent by lessor after notice of intention to cancel lease given not to operate as waiver of lessor’s rights

251 Powers of court in making order for possession

252 Effect of sections 244 to 251

253 Relief against cancellation of lease for breach of covenant or condition

254 Mortgagee or receiver may apply for extension of time for bringing proceedings

255 Application for relief not to constitute admission

256 Powers of court on application for relief

257 Effect of order granting relief against cancellation of lease

258 Protection of sublessee on cancellation of superior lease

259 Interested person may apply for extension of time for bringing proceedings

260 Powers of court on application for relief by sublessee

261 Relief against lessor’s refusal to enter into renewal or sell reversion to lessee

262 How application under section 261 for relief under section 264 to be made

263 Matters lessee must be informed of by notice

264 Relief court may grant on application

Abolition of right to distrain

265 Right to distrain abolished

Miscellaneous matters

266 Removal of fixtures by lessee

267 Effect of unlawful eviction on lessee’s obligations

268 Application of sections 269 and 270

269 Exoneration of lessee if lessor is insured

270 Rights of lessor if insurance for leased premises or land is affected by negligence of lessee or lessee’s agent

271 Lessee may acknowledge lessor has not insured, or fully insured, premises

272 Instruments have no effect so far as they conflict with section 269, 270, or 271

273 Effect of waiver

Subpart 7Miscellaneous

274 Administrator not personally liable

Part 5
Covenants, easements, profits, and access lots

Subpart 1Covenants: nature and effect

275 Sections 276 to 278 apply to covenants express or implied

276 Effect of covenants made by 2 or more covenantors

277 Effect of covenants for benefit of 2 or more covenantees

277A Certain covenants void

278 Covenants persons made with themselves

279 Construction and variation, etc, of implied covenants

280 Covenants implied by this Act are generally cumulative

281 Only by enactments can covenants be implied as matter of law in certain instruments relating to property, etc

Subpart 2Covenants implied in certain instruments

282 Application of subpart

283 Covenants implied unless contrary intention expressed

284 Covenants implied in instruments creating, transferring, or assigning estates or interests in land

285 Covenant implied in instruments transferring or assigning lease of land

286 Covenants implied in instruments by fiduciary or mortgagee

287 When person executes instruments in fiduciary capacity for purposes of section 286

288 Covenants implied in encumbrances of property

289 Covenant implied in transfers or assignments of land subject to encumbrance

290 Restriction on liability of certain administrators or trustees on covenant under section 289

Subpart 3Easements, profits, and access lots

Creation, benefits, burdens, apportionment, etc, of easements, etc

291 Easements in gross permitted

292 Easement includes profit, etc, in sections 293 to 296

293 Easements, etc, granted for fixed term: benefits

294 Easements, etc, granted for fixed term: burden

295 Easements, etc, granted for fixed term: apportionment after severance of reversion as regards land or estate

296 Easements, etc, can no longer be acquired by prescription

Vehicular rights of way

297 Covenants implied in grant of vehicular right of way

Access lots

298 Rights of proprietors of access lot that is or includes driveway or proposed driveway

Light or air

299 Grant of easement of light or air

300 Effect of easement of light or air

Subpart 4Covenants: operation

301 Construction of covenants relating to land: benefits

302 Construction of covenants relating to land: burdens

303 Legal effect of covenants running with land

304 Whether, and to what extent, administrator bound by covenant to which section 303 applies

305 How rights under covenant to which section 303 applies rank in relation to other unregistered interests

306 Certain duties under, and law on, restrictive covenants not limited or affected by section 303

307 Notification of covenants

Subpart 5Easements, covenants, and access lots: enforcement, modification, and extinguishment

Enforcement of covenants by giving notice of work required

308 Person entitled may give notice of work required

309 Requirements for notice served under section 308

310 Person bound who does not agree may serve cross-notice

311 Circumstances in which person bound is not liable

312 Person entitled or person bound ceasing to be owner or occupier

Enforcement, modification, and extinguishment of easements, covenants, and access lots by order of court

313 Court may enforce easements and positive or restrictive covenants

314 Duties of court making order under section 313(1)(e) on sharing of cost of work under vehicular right of way

315 Application of sections 313 and 317, etc, to access lots

316 Application for order under section 317

317 Court may modify or extinguish easement or covenant

318 Registration and recording of orders under section 317

Part 6
Special powers of court

Subpart 1Entry onto neighbouring land

319 Owner or occupier of land may apply to court for order authorising entry onto or over neighbouring land

320 Powers of court making order authorising entry onto or over neighbouring land

Subpart 2Wrongly placed structures

321 Interpretation

322 Certain persons may apply for relief for wrongly placed structure

323 Court may grant relief for wrongly placed structure

324 Matters court may consider in determining application for relief

325 Orders court may make

Subpart 3Landlocked land

326 Interpretation

327 Owner or occupier of landlocked land may apply to court

328 Court may grant reasonable access to landlocked land

329 Matters court must consider in determining application for order for reasonable access

330 Court may impose conditions in making order for reasonable access

331 Costs of work giving effect to order

Subpart 4Trees and unauthorised improvements on neighbouring land

332 Application of this subpart

333 Court may order removal or trimming of trees or removal or alteration of structures

334 Owner or occupier of land may apply for order under section 333

335 Matters court may consider in determining application for order under section 333

336 Further considerations relating to trees

337 Court may impose conditions in making order under section 333

338 Completion of work required by order under section 333

Subpart 5Division of property among co-owners

339 Court may order division of property

340 Order under section 339(1)(b) subject to restrictions on subdivision of land

341 Application for order under section 339(1)

342 Relevant considerations

343 Further powers of court

Subpart 6Setting aside of dispositions that prejudice creditors

344 Purpose of this subpart

345 Interpretation

346 Dispositions to which this subpart applies

347 Application for order under section 348

348 Court may set aside certain dispositions of property

349 Protection of persons receiving property under disposition

350 Person in or to whom order under section 348 vests property or makes compensation for it payable

Part 7
Miscellaneous provisions

Land not owned by the Crown and not under Land Transfer Act 1952

351 Application of Schedule 6

Service of notices and other documents

352 Documents to which section 353 applies

353 How documents in section 352 to be given or served

354 How other documents to be given or served

355 Person to or on whom document to be given or served in special cases

356 Sections 353 to 355 and service in legal proceedings

357 Orders dispensing with, or directing manner of, service

358 Agent defined for purposes of sections 353 and 355

359 Manner of giving or serving notices

360 Receipt for purposes of section 359

361 Time of service if more than 1 person to be served

District Courts’ jurisdiction, regulations, consequential amendments, repeals, etc, and savings and transitional provisions

362 Jurisdiction of District Courts

363 Regulations

364 Consequential amendments

365 Imperial enactments relating to property no longer part of law of New Zealand

366 Property Law Act 1952 and 2 related Acts repealed

367 Existing matters, proceedings, and instruments

368 Distraint may be completed

369 Transitional provisions relating to Insolvency Act 2006

370 Transitional provisions relating to Companies Amendment Act 2006

371 Transitional provision relating to Insolvency (Cross-border) Act 2006

Schedule 1
Form of certificate of non-revocation of power of attorney

Schedule 2
Covenants implied in mortgages

Schedule 3
Covenants, conditions, and powers implied in leases of land

Schedule 4
Covenants implied in certain instruments

Schedule 5
Covenants implied in grants of vehicular rights of way

Schedule 6
Provisions applying to land not owned by the Crown and not under Land Transfer Act 1952

Schedule 7
Consequential amendments

Reprint notes