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Land Transfer Act 2017

Dealings in estates and interests in land - Mortgages

102: Mortgage priority instrument required to vary priority of mortgages

You could also call this:

"Changing the Order of Mortgages on a Property Requires a Special Document"

Illustration for Land Transfer Act 2017

You need to use a mortgage priority instrument to change the order of mortgages. This instrument helps decide which mortgage comes first when there are multiple mortgages on a property. When you register this instrument, the mortgages will have the order specified in it, as stated in the section 35 of the Land Transfer Act 2017. You must execute the mortgage priority instrument if you are the mortgagor or the mortgagee. The instrument must have the required information and the consent of any submortgagee if it changes the order of their mortgage. This consent will also apply to anyone who gets an interest in the submortgage later. In this context, a mortgage includes any registered charge that secures the payment of money under the Land Transfer Act 2017 or any other Act. The mortgage priority instrument is an important document that helps clarify the order of mortgages on a property. You can find more information about this in the related section of the legislation.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6731245.

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Part 3Dealings in estates and interests in land
Mortgages

102Mortgage priority instrument required to vary priority of mortgages

  1. A mortgage priority instrument must be used in order to register a variation of the priority of registered mortgages between themselves.

  2. Despite section 35 (which relates to the priority of instruments), the mortgages have, on registration of the mortgage priority instrument, priority in the order specified in the instrument.

  3. The prescribed conditions and powers are, on registration of a mortgage priority instrument, implied in a mortgage the priority of which is postponed, except as otherwise stated in the instrument.

  4. A mortgage priority instrument must be executed by—

  5. the mortgagor; and
    1. the mortgagee under a mortgage that, on registration of the mortgage priority instrument, will rank after a mortgage over which it had priority immediately before registration of the instrument.

      1. A mortgage priority instrument must contain the prescribed information.

      2. The consent of a submortgagee of a mortgage must be obtained before registration of a mortgage priority instrument that postpones the priority of that mortgage.

      3. The consent under subsection (6) binds the submortgagee and every person who subsequently derives an interest in the submortgage from the submortgagee.

      4. In this section, mortgage includes a registered charge securing the payment of money under this Act or any other Act.

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