e-dealing Client References

Those of you who are e-dealing will be aware of the "Client Reference" option available in Landonline. The tools menu allows inclusion of your client reference against any searching or e-dealingregistration. This reference appears on your LINZ account or on a self-generated billing summary.

The purchaser sets up the entire e-dealing, including the vendor's discharge(s) required on settlement. This is analogous to noting all instruments on an abstract for a paper dealing, which would include the vendor's discharge(s).

With registration, the transferee (purchaser) is usually responsible for payment. When the purchaser creates the e-dealing, he or she will populate the "Client Reference" to enable subsequent reconciliation upon receipt of the LINZ account.

While the client reference field can accommodate more than 20 characters, only the first 20 characters will appear on the account.

Some vendors have been replacing the purchaser's client reference with their own, without appreciating the effect that this has on the purchaser. The purchaser, as the submitting party, will not have his or her client reference noted with the registration fee appearing on the LINZ account. Accordingly, the purchaser will be unable to reconcile the LINZ account with his or her own client matter.

If vendors wish to have the client reference as a tool to track work within their firms, they are still able to do so by including their own client reference after the purchaser's client reference. This will still allow the purchaser to reconcile his/her account.

It should be possible to share the 20 character reference between the vendor and the purchaser. If your client reference exceeds 10 characters, it might be time to review your system. If car registration plates can be limited to six characters for the million plus vehicles in New Zealand, we should be able to limit client references to 10!

What about the vendor's disbursement cheque?

Given that minimal paper needs to be exchanged with an e-dealing, it seems inefficient to initiate a cheque request, have it printed and signed and sent in respect of the electronic discharge, especially when no other documents need to be sent.

The option of allowing the vendor to be billed for its component of the registration fee within Landonline was considered and rejected at the time of design. The complexity of the billing procedure and additional costs associated precluded it

The best alternative to drawing a disbursement cheque is to note the disbursement as a credit on the settlement statement. Interestingly, this practice has been followed in Otago for some years, even before the advent of e-dealings, and it is a widely accepted alternative to sending a cheque.

Some of you may claim that it will confuse your client. The reality is that few clients understand settlement statements other than the purchase price and deposit amount. As a challenge, next time you explain the rates apportionment to a client, get them to explain it back to you and see how well they comprehend it.

Provided it is clearly shown on the settlement statement that the disbursement is a credit for a discharge registration fee, it is unlikely to be an issue and is certainly more convenient than creating a cheque requisition, having a staff member write it up, having it signed and posted and entered into your accounting system.

To keep life simple, try noting the disbursement as a credit on the settlement statement.

"Multi party" / "single party"

Multi party is used where clients are separately represented, for example, with a standard sale and purchase the transferee and transferor would be separately represented. "Party" in multi party means the solicitor in that context, not the client.

Landonline automatically defaults the settings to the most common scenario. The transferee and transferor are generally separately represented by their own solicitors. Accordingly, the default setting is 'multi' in the 'parties' column of 'prepare dealing' screen.

The exception is where the solicitor is representing both parties such as a transfer to a trust. In that situation the setting would be changed to 'single' party.

Most mortgages will have the mortgagee and mortgagor represented by the same solicitor. Accordingly, the default setting is to 'single' party. In a larger commercial transaction the mortgagee may be separately represented and a change to 'multi' party setting would be required.

Please note that any change to these default settings will cause any certifications made to a signed instrument to be cleared. The "pen" symbol beside an instrument in Workspace clearly shows if an instrument has been signed. As a matter of professional courtesy, no change should be made without first consulting the other solicitor. Certainly no changes should be made on settlement day.

Roles

The "prepare dealing" screen has a "roles" box which notes the various headings of "instrument", "role", "primary contact", "conveyancing professional", "resp for release", "resp for submit". The dealing will be submitted as a whole in exactly the same way as all the instruments are noted on the abstract in the paper environment, with only one party lodging the entire dealing.

Only one check box will show as "resp for submit". This would be the transferee (purchaser) in a sale and purchase situation. Again, these will default to the most common scenario.

Release and submit

The roles of "release" and "submit" are direct parallels with the paper process; the method is the same.

"Release" is effectively the same as handing over the documents on settlement or posting them after a fax settlement has been completed.

"Submit" is lodgement with LINZ electronically. As registration is effected instantaneously, "submit" effectively becomes registration.

The parties responsible for "release" and "submit" have roles analogous to those in a paper transaction. It is very rare that any change should be needed for the tick boxes for these roles. When in doubt, remember that the same principles apply as in a paper dealing.

Any inappropriate change to these defaults will invariably delay settlement and careful consideration should be given before any change is made. For example, you would not send a replacement transfer to a vendor on settlement day and demand for it to be signed on that same day. The same principle applies to electronic instruments if they have been prepared by you and certified and signed by the other side. You should not make unilateral changes on settlement day and expect resigning on that same day.

Duncan Terris
NZLS e-dealing Consultant
The Property Lawyer
Volume 6, Issue 2, June 2005