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When you own land in New Zealand, you have certain rights attached to that ownership. But, these rights can be difficult to understand when they’re buried underneath documents full of legal jargon. It is important to understand what rights and legal protections you have as a landowner because that determines what you can do if something goes wrong. One of those rights is indefeasibility of title. This means that as the registered owner of your land, you are protected against unregistered claims against your property. You get to control how your ownership of the land functions, without other people interfering. This article will explain how indefeasibility of title works and how you may be affected by it.

What Does Indefeasibility of Title Mean?

When you own land in New Zealand, you own the ‘title’ of that land. That title is recorded on a central public register governed by the Land Transfer Act (LTA). This title is ‘indefeasible’, meaning that it cannot be overturned or put aside by competing claims for your land. 

Indefeasibility is a crucial part of how our land ownership system works. If your interest in the land is registered, then you are protected against adverse claims to ownership or usage of the land made by other parties without a registered interest.

For example, if your neighbour tells you that they had an arrangement with the prior landowner to use your land, you can confirm this by checking the property register. If it is not registered, then you do not have to honour this interest.

There are three critical reasons as to why land ownership works in New Zealand in this way:

  • the register accurately mirrors the reality of who owns the property;
  • when buying land, purchasers should not have to worry about any hidden interests in the land; and
  • the state can guarantee the title on the registry, and provide for losses that happen because of any errors.

This register system simplifies the process of dealing with land, as the register takes priority over competing interests, making dealings more certain. It is important to note that if the court finds that a “manifest injustice” occurred when you acquired the land, they may be able to strike you off of the register.

How Do I Register My Interest in Land?

When you buy new property or gain some other registrable interest, your lawyer will register your interest with LINZ. They can do this registration online.

For example, say you are buying a new commercial property. Part of the transfer of ownership will include your lawyer submitting legal documents notifying LINZ that the registered title has transferred to your name. 

Exceptions and Limitations

Fraud

If you gained your title through fraud, the indefeasibility of title may not apply. Here, the court can overturn your ownership. Under the law, this kind of fraud means forgery or any other sort of dishonest misconduct on the part of the registered proprietor.

For example, forging a signature on legal documents transferring ownership would count as fraud, and the court could order the forger to pay compensation. If they are the registered owner, the Court may strike off their ownership completely.

However, if you have a registered interest in the land and you played no part in the fraud yourself, then you may be protected against such an exception. Factors that would help this include:

  • completing a thorough customer due diligence process;
  • taking reasonable steps to verify signatures; 
  • confirming agreements; and
  • acting reasonably, fairly, and in good faith.

Other Registered Interests

Indefeasibility of title, while broad, does not protect you against other registered interests on the register. If you buy land and someone else already has a registered interest in it, such as an easement, then you have to honour that interest in most cases.

Māori Title

Some land in New Zealand is owned through a parallel system – Māori freehold land. This is land that has never been transferred from Māori ownership. Therefore, it is not dealt with under this registry system. Most dealings with Māori freehold land has to be approved by the Māori Land Court. 

With two systems running like this, there can be conflicts as to which method of owning land prevails. Under the current law, if you own land using the system given by the LTA, that interest will usually have priority because of indefeasible title.

Key Takeaways

Having a land registry system means that dealing with land transactions is simplified. It also provides a degree of certainty to these dealings. If your name is the one on the title on the property registry, then indefeasibility of title gives you superior property interest against any unregistered interests. However, it is important to know that this does not necessarily protect you against other registered interests in your land. Also, you are still liable if you obtain this interest fraudulently. If you would like more information or help with your land dealings, contact LegalVision’s property lawyers on 0800 005 570 or fill out the form on this page.

What does indefeasibility of title mean?

Having an indefeasible title means that if you are the registered owner of a piece of land, then you have the superior property interest. This means that if someone else tries to make a claim against your land, and they do not have registered interest, you do not have to honour this claim.

What is fraud?

In regards to property and land ownership, fraud means dishonest conduct or forgery involved in the obtaining of the land. This can include misrepresentations about the land, or forging a signature.

What is the Torrens system?

The Torrens system is the name for this kind of land ownership system, where ownership of a piece of land is listed on a national register. This simplifies land dealings, and the registered proprietor has a superior property interest.

How do I know if I am the registered owner of my property?

When you buy property, your lawyer will go through the process of registering your ownership on the national property register through LINZ. You can also check this register at a later time.

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