Under the Land Transfer Act 2017, which of these interests takes effect only once its instrument is registered?
Correct Answer
A) A mortgage securing a bank loan over the property
A mortgage over land under the Land Transfer Act 2017 is created by registering a mortgage instrument (s 100), and an instrument has no effect under the Act until registered (s 24). Short-term leases of one year or less, including oral periodic tenancies, give the tenant a legal interest without registration under sections 208 and 209 of the Property Law Act 2007, subject to the Land Transfer Act. A licence is a personal permission and is not registered.
Why This Is the Correct Answer
Section 24 of the Land Transfer Act 2017 says an instrument has no effect under the Act until registered, and a mortgage of registered land is registered using a mortgage instrument (s 100). The registered mortgage then takes priority from registration. Short leases and licences, by contrast, operate without registration.
Why the Other Options Are Wrong
Option B: A six-month fixed-term residential tenancy set out in a signed agreement
A fixed-term lease of one year or less is a short-term lease that gives the tenant a legal interest without registration (Property Law Act 2007 s 209).
Option C: A licence letting a neighbour store their boat on the section
A bare licence is a personal permission, not an interest in land, and it is not registered on the title.
Option D: A weekly periodic tenancy agreed orally between owner and tenant
An oral periodic tenancy is a short-term lease that can be made orally and creates a legal interest without registration (Property Law Act 2007 ss 208-209).
Deep Analysis of This Property Law Question
The question contrasts registered interests with interests that exist off the register. Lenders register mortgages to secure their priority; short tenancies and personal licences are not registered.
Background Knowledge for Property Law
Registered interests under the Land Transfer Act 2017 include transfers, mortgages, leases (via a lease instrument, s 91), easements and covenants. Under section 24 these instruments have no effect under the Act until registered. Short-term leases (one year or less, or periodic tenancies of periods of one year or less) may be oral and give a legal interest (Property Law Act 2007 ss 207-209), subject to the Land Transfer Act. There is no general three-year rule under the 2017 Act.
Memory Technique
Remember 'banks register': lenders always register their mortgages, because without registration the mortgage has no effect under the Land Transfer Act.
When choosing which interest depends on registration, pick the mortgage; short tenancies and licences sit off the register.
Exam Tip for Property Law
Do not rely on an old 'three-year lease' rule. The Property Law Act's short-term lease is one year or less.
Real World Application in Property Law
A buyer borrows from a bank to buy a house. At settlement the lawyer registers the transfer and, immediately after, the bank's mortgage. Only once the mortgage is registered does the bank hold a registered security with priority over later dealings.
Common Mistakes to Avoid on Property Law Questions
- •Applying a three-year registration threshold that the 2017 Act does not contain
- •Thinking residential tenancies must be registered
- •Treating a licence as an interest in land
Related Topics & Key Terms
Key Terms:
More Property Law Questions
Under the Unit Titles Act 2010, who is responsible for maintaining the common property in a unit title development?
A real estate agent discovers that a property they are marketing has a significant structural defect that the vendor has not disclosed. Under the Real Estate Agents Act 2008, what should the agent do?
Under the Property Law Act 2007, what is the effect of a properly executed deed compared to a simple contract?
Which document is required to be registered under the Land Transfer Act 2017 to transfer ownership of fee simple land?
Under the Land Transfer Act 2017, which of the following would NOT be registered or noted on a record of title?
- → A real estate agency holds a client's deposit in their trust account. Under the Real Estate Agents Act 2008, the agency becomes insolvent. What protection does the client have for their deposit?
- → Under the Unit Titles Act 2010, who is responsible for insuring the common property of a unit title development?
- → A client complains to a salesperson about the service they received. Under the Client Care Rules, what must the licensee make sure the client knows?
- → According to the Land Transfer Act 2017, what is the primary purpose of the land transfer system?
- → A lawyer is verifying a client's identity before certifying an electronic land transfer instrument. Which document, on its own, would NOT be enough?
- → A registered owner disagrees with a decision the Registrar-General of Land made about their record of title. After any review by the Registrar, where can they appeal under the Land Transfer Act 2017?
- → Under the Unit Titles Act 2010, owners of what share of the principal units can require an extraordinary general meeting to be held?
- → A licensed real estate agent has been convicted of a serious criminal offence unrelated to their real estate work. Under the Real Estate Agents Act 2008, what disciplinary powers does the Real Estate Agents Disciplinary Tribunal have in relation to the concept of 'fit and proper person'?
- → A licensed salesperson is convicted of fraud in dealings outside their real estate work. Under the Real Estate Agents Act 2008, what can follow?
- → A licensed real estate agent is found to have misappropriated client funds from their trust account. Under the Real Estate Agents Act 2008, which statement correctly describes how far the Real Estate Agents Disciplinary Tribunal's powers go?
People Also Study
Agency Practice
89 questions
Sale & Purchase Process
63 questions
Professional Conduct & Ethics
46 questions
Property Management
85 questions