Back in the 1980s when Phil Sewell was starting out in law, property settlements (almost always on Fridays) were done quite simply – turn up with a bank cheque and get the title, transfer and keys in exchange. It was a bit like buying a car – turn up with the money and get the keys. Phil recalls the drama of settlements in those days, with law clerks and lawyers often running around town to collect bank cheques and then get the keys in time. It kept everyone fit but it was stressful and inefficient.
By contrast, settlements in 2023 are less stressful and no one needs to leave the office. By giving solicitors “undertakings” in advance everyone is protected and the transactions can take place at a distance. These “undertakings” are solemn promises given by one law firm to another. In simple terms, it is a promise to do something – for example, to authorise the land agent to release the house keys once the money comes through. But the undertakings are more serious than simple promises – they are enforceable against a non-performer. Failure to honour an undertaking will mean disciplinary proceedings against the lawyer. It is this aspect which makes the undertaking reliable – they can be relied on.
The other modern aspect of property settlements is paying on line, by “Same Day Cleared Payments”. Cheques are long gone in NZ now and payment direct is the norm for most people. With property settlements the numbers have lots of zeroes and as a result lawyers have special procedures and rules about the method of payments. One important aspect is phoning the receiving law firm to check their bank account details – rather than rely on an email, which might have been hacked. Cyber risk is a real risk for lawyers.
Modern property transactions have a myriad of small steps, behind the scenes, to make everything work. That is the benefit of using experienced property lawyers – they know the routine and can be relied upon!
