Land Information New Zealand (LINZ) says it has seen an increase in the number of mortgagee consents provided in the form of bank letters of instruction to solicitors.

Section 224 of the Resource Management Act 1991 requires written consent from a mortgagee where land is being vested in the Crown or a territorial authority on deposit of a plan.

LINZ says letters of instruction do not meet the requirements of the RMA. It says they are often unsigned and they frequently contain personal information relating to the borrowers.

"Letters of instruction are routinely used by banks to provide authority to solicitors to discharge mortgages. However, this is different from consenting under the RMA because solicitors must certify discharges of mortgage, while they are not required to certify plan deposits under the RMA," it says.

"Mortgagee consent to the deposit of a plan should be provided using the approved annexure schedule consent form “M” or a consent form prepared by solicitors that contains the necessary information and is executed by the mortgagee."