The Pamphlet Collection of Sir Robert Stout: Volume 44
Chapter IV. Land and Title
Chapter IV. Land and Title.
To the inestimable blessings of a fertile soil and a healthful climate, the settler can add the benefit of a simple land-law altogether free from the intricacies and technicalities with which the feudal system and the skill of lawyers and conveyancers have loaded titles to the broad acres of Old England. All the public land in the colony was originally acquired by purchase from the Maoris, except that which was the property of the rebel tribes in the North Island, and confiscated at the conclusion of the war, partially to compensate for its cost. The lands in the hands of the government are termed the waste lands of the crown. They are under the general administration of one of the ministers, designated the Secretary of Crown Lands, and the local administration of commissioners of crown lands, one of whom acts along with a Board in each of the ten land districts into which the colony is divided.
There are three classes of land—namely, town land, suburban land, and rural land. The first two classes must be sold by public auction, the upset price of the town land not being less than £30 an acre, and the suburban land not being less than £3 per acre. The town sections are usually each a quarter of an acre in extent. Competition for corner sections, or others favourably situated, is sometimes very keen, and frequently £50 for a good section is realised. Good suburban land will fetch at auction from £5 to £30 an acre. Suburban sections are generally ten acres in extent. The upset price of land varies in each provincial district. In Canterbury there has always been free selection at forty shillings per acre. All good agricultural land there has been picked up long ago. In Taranaki, land may be selected in blocks specially set apart for that purpose, at twenty shillings per acre for bush land, and forty shillings per acre for open page 31 land. In other districts, twenty shillings an acre used to be the price; but nowhere now, where land is open for selection, can land, according to the Crown Lands Act, 1877, be bought from the government at a less price than £2 per acre. In such districts, however, land of any agricultural value already proclaimed open for selection has been years ago taken up.
In practice, the land boards now almost invariably dispose of the lands by public auction, and they fix the upset price, which by law cannot be under £1 per acre, with due regard to the situation and quality of the land, and also to the fact that the value of all land has been enhanced by the construction of the public railways. It therefore happens that when first-class land is offered for sale, there is always a keen competition, and from £3 to £10 an acre, and sometimes more, is given, according to position value, and other circumstances. In Auckland, blocks of land are occasionally set apart for occupation on the homestead system, under which a family of four persons may secure a farm of 200 acres, subject to continuous residence and certain conditions as to cultivation for five years.
In Otago and elsewhere, blocks of land are proclaimed from time to time open for sale on deferred payments. The price is £3 per acre, payable in ten years by half-yearly instalments, without interest. Good sections are sure to have more applications than one made for them, and the consequence is that the land is put up to auction, the bidding being limited to the applicants. In this way the upset price is sometimes materially increased. Indeed, it may be said that the cheap prices for land current in early times are altogether past. But it may be added that present prices are by no means commensurate with the productive value of the land when in the hands of those who have means and skill to work it properly. The following is a newspaper report of one of the recent sales of deferred-payment land: Mr R. B. Martin, government auctioneer, offered for sale by auction on 30th May 1879, at the Court-house, Oamaru, the deferred-payment sections in the Kurow block for which duplicate applications had been received, and also the rural land in the same block. The sale began punctually at the hour advertised—1 P.M. For the deferred-payment land the competition was in some instances very keen, and the applicants appeared to be of a class likely to prove bonâ-fide settlers. The result of the sale was as follows: The deferred-payment sections comprised sections 7, Block II.; 2, 3, 4, 7, and 9, Block III.; and were page 32 offered at the upset of £3 per acre, with an advance at each bid of Is. 3d.
The only other mode of acquiring land is, by purchase from private owners, many of whom having acquired their land at a nominal rate in past years, are willing to dispose of their farms at current prices and realise their profit. Some owners of large tracts of country selected in early days, are finding it to their advantage to subdivide their estates into small farms and sell them. There have been numerous transactions where prices varying from £5 to £30 an acre have been recently paid for sections of land. It must not be imagined that these prices have attained to their maximum. It has been established by experience that in every prosperous country, land, of whatever kind, is always increasing in value. New Zealand has been no exception to this rule. In many instances, land in the cities has acquired a fabulous value. £16,000 have been refused for a quarter of an acre in Dunedin, which cost thirty years ago £12, 10s. Similar values prevail in Christchurcn and Wellington. In some parts of the latter city they are even exceeded. These prices are not fanciful. As a rule, whenever land is all taken up, then the value rises with the demand, which constantly increases in a young and progressive country. Although high prices have been paid for urban land, sometimes as much as £200 for the foot of frontage, there is no reason to believe that the maximum has been attained. In Melbourne recently, sections have been repeatedly sold at rates from £500 to £590 for the foot of frontage. In one instance the increase on the original price was 193,416 per cent., or at the rate of 5089 per cent, per annum. A like increase continually goes on in the value of rural land. For land which originally cost 20s. an acre, prices varying from £5 to £35 per acre have been paid. Nor is such a rise in price unwarranted. The cost of the private improvements, page 33 often amounting to £6, £7, and £10 an acre, according to circumstances, enhances the original value; and the public improvements, in the shape of roads, bridges, and railways, have also a material effect in adding to the value. It may be said that the development of the railway system, already a signal success, the gross revenue being at the rate of a million sterling per annum, has more than doubled the value of real estate in the colony; and in the case of land intersected by the lines has added to its value in a much greater ratio. First-class agricultural land, fenced and improved, and conveniently situated, must be regarded as low in price estimated at £20 an acre. £3 per acre per annum of clear profit is under the average. We know of an instance of a settler purchasing 200 acres improved land at £15 an acre, and clearing his whole purchase price from his first crop. But taking the low average mentioned, it is highly improbable that good land will remain at its present value. As society progresses in population and wealth, and as new branches of industry develop and prosper, so will the value of land steadily increase. As has been well observed, land is the natural deposit bank into which all the savings of the community gravitate. Every improvement of a public nature in the way of harbours, roads, and railways, goes to add to its value without effort on the part of the owner. There is every reason to expect that land in New Zealand will touch a far higher price than has yet been dreamt of. No one can believe that land in a country occupied by less than half a million of people, will be purchasable at present current prices when the country contains a population of several millions. A capitalist is therefore dealing in safety when he advances money, or becomes the actual owner of land, on the basis of present values. In the one case his margin of security is always widening, and in the other he is certain to find that in the course of twenty years he has at least doubled his capital, while in the meantime he has been in the enjoyment of a reasonable annual return.
There is also a specialty in land in New Zealand which ought not to be overlooked, and it is this—the area is limited in extent. There is none of the boundless back-country which exists in the neighbouring colonies. No part of New Zealand is above 100 miles from the sea-board, in the South Island 75; and when the Crown shall have parted with the last acre of its waste lands, then the value of freehold throughout the colony will rise with a bound, to an amount to which it is difficult to assign a limit.page 34
The nature of the title to land may now be briefly explained. The original deed in every case is a grant from the Crown describing the parcel of land, and having a plan thereof delineated on the margin. Record maps of all the land granted are kept. The grants are also duly recorded, and there is a complete system of registration, in the books of which there are not only copies entered of every transmission, but there is also a ledger account of every parcel of land and all its subdivisions, by which the state of the title can be seen at any moment at a glance. This enables a solicitor, after having examined the progress of title, to satisfy himself at the settlement of every transaction, that it may be finally completed in safety. He then places on the register the deed in favour of his client, and an indefeasible title is the result, thoroughly protected against any latent or unrecorded right. The form of conveyance in use is simple and defined by statute. Various enactments have been passed for the protection of mortgagees. They have power, in case of default in payment of interest for six months, to sell the mortgaged property either as a whole or in lots, and either by public auction or private contract, subject to such conditions as they may think fit, and to buy in and resell the same. A mortgagee may also require the Registrar of the Supreme Court to conduct the sale, and the mortgagee may then himself become the purchaser; and the Registrar is bound to execute a deed fully vesting in the mortgagee the property mortgaged, any rule of law or equity notwithstanding. Simple and efficient as the practice was under the Conveyancing and Deeds Registry Acts, greater simplicity and security have been attained by the passing of the Land Transfer Act, 1870. By this act, title by registration has been substituted for title by deed. It applies to all land bought from the Crown since the act came into operation, and to all other land previously acquired as the parties interested therein may desire. A large proportion of the previously acquired land has been brought under the operation of the act, and gradually the whole land in the colony will be so. The certificate of title issued by the Registrar is conclusive evidence that the person named in it is entitled to the land it describes, and it operates as a government guarantee that the title is perfect. It is indefeasible, and there is no going behind it. Special provisions have been made as regards mortgages, with full power of sale, and various implied covenants for the protection of the mortgagee. Transfer of the mortgage may be made by page 35 indorsement, and foreclosure is a very simple and inexpensive process, completed by the issue of a certificate vesting the land in the mortgagee with an indefeasible title. The principles of feudal law are set aside, and land can be dealt with as easily as a share in a ship or a joint-stock company, and with the same security as regards title. Trusts are not recognised. Instruments declaring trusts may, however, be deposited with the Registrar for safe custody. These deeds are binding between the parties to them, but they in no way affect persons dealing with trustees, who are registered proprietors. Under the Land Transfer Act, it is not necessary to examine the deeds in the abstract of title. These no longer exist. They have been delivered up to the Registrar; and when a certificate of title is issued, they are cancelled. An investor, therefore, does not run the risk of a mistake or blunder of his solicitor. Every transaction has in it finality and complete security guaranteed by the state. In Great Britain there is an agitation to obtain a much needed reform in the laws dealing with land. The beneficial amendments in the law so much desired, are fully carried into effect in the colony, and the monopoly of lawyers as conveyancers has been abolished, the Land Transfer Act authorising the Registrar-general to license fit and proper persons as land-brokers, although not solicitors. The complexity, the expense, the delay, and the uncertainty incidental to the English system of conveyancing, and partially to the old New Zealand system, have been wholly obviated under the new procedure. Under the old conveyancing ordinance in force in New Zealand the costs were limited to a half per cent, on the purchase price. This wholesome provision was tacitly ignored by the profession. They declared that with their increased expenditure, especially in clerks' wages, such a rate was inadequate. They therefore contrived, with the consummate skill displayed by English lawyers in framing a bill of costs, to charge never less than from £5 to £10 on the smallest transaction. It so happened that a firm had occasion to prepare the transfer of a very large block of land, worth more than £200,000. They found it convenient, instead of following the recognised practice of charging reasonably for the time occupied, to fall back on the statutory half per cent., and they pocketed a very large sum for the single transaction. This led to the percentage enactment being repealed by a special act during the next session of parliament. The fees payable to solicitors and land-brokers under page 36 the act of 1870, are prescribed by the Registrar-general and fixed upon a very moderate scale. An owner may even dispense with the services of a solicitor or broker. Every obstacle against land being a marketable commodity is thus completely removed.
Vast tracts of country in the interior, of a hilly nature, generally unfitted for agriculture, are held on lease from the Crown for pastoral purposes. In Canterbury the rent varies from ninepence to two shillings for every head of sheep, and from four to ten shillings for every head of cattle. In Otago the rent is fixed at public auction. The quantity of stock carried on a run varies according to the extent. From 20,000 to 50,000 sheep are not an unusual number, and some lessees who occupy several runs possess upwards of 100,000. Under the latest Land Act (1877) it is provided that when leases fall in, the lands are to be exposed for lease by public auction; and no larger extent shall be offered in one lot than will be sufficient to carry all the year round 5000 head of sheep, or 1000 head of cattle, the object in view being to settle as many families as possible as pastoral lessees, and limit the enormous extent of land occasionally occupied by a single individual.
The government also lease land containing minerals, at a money rent varying according to circumstances, for a term not exceeding twenty-one years; and in the districts proclaimed as gold-fields, the digging for gold and quartz-crushing are carried on by the miners under prescribed regulations as to license and payment of fees.