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Land Transfer Act 2017

Dealings in estates and interests in land - Flat and office owning companies

134: Bringing down of mortgage on new licence

You could also call this:

"What happens to a mortgage when a licence is transferred to a new owner"

Illustration for Land Transfer Act 2017

You have a licence that has a mortgage on it. If you sell your shares in the company, the company might cancel your licence. The company can then give a new licence to the person who buys your shares. This new person can ask the Registrar to put the mortgage on the new licence. When the new licence is registered, the Registrar must put the mortgage on it. The new licence will be subject to the mortgage. The subpart 8 of Part 3 of the Property Law Act 2007 will apply to the new licence. If there is a mortgage on the new licence, it will refer to the new person who has the licence. This means the mortgage will be against the new person, not you.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6731308.

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133: Surrender of licence, or

"Giving up a licence on a piece of land"

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135: Priority of replacement mortgage over land of company, or

"A replacement mortgage on company land keeps its priority if it meets certain conditions."

Part 3Dealings in estates and interests in land
Flat and office owning companies

134Bringing down of mortgage on new licence

  1. This section applies if—

  2. a licence is subject to a registered mortgage; and
    1. the licensee transfers the shares in the company to another person; and
      1. as a result of the transfer of the shares, the company cancels, revokes, or rescinds the licence, or the licence is surrendered, and the company then issues a new licence for the same flat or office to the person who acquires the shares (the new licensee).

        1. The new licensee may, on presenting the new licence for registration, apply to the Registrar to register the mortgage against the new licence or, if there is more than 1 mortgage, such of the mortgages as the new licensee specifies.

        2. On registration of the new licence,—

        3. the Registrar must register the mortgage or mortgages specified in the request in the order of their registered priority; and
          1. the new licence is subject to the mortgage or mortgages; and
            1. subpart 8 of Part 3 of the Property Law Act 2007 applies as if the new licensee had acquired the licence by conveyance or transfer subject to the mortgage or mortgages registered against it.

              1. References in a mortgage registered against a new licence under this section to the licensee or to the estate or interest of the licensee under the mortgage are references to the new licensee or to the estate or interest of the new licensee under the mortgage.

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