Jonathan Simons
The property sector in New Zealand has long been grounded in traditions and legal formalism – paper trails, wet ink signatures, in-person settlements and manual registrable interests.
This is changing with the introduction of new technology relating to digitisation and electronic registration systems.
The rapid growth of smart contracts, blockchain-based systems and artificial intelligence (AI) signals the next phase of technological development within real estate legal practice.
While much of the meaningful momentum is offshore at this stage, New Zealand’s property sector will need to quickly engage with the opportunities and risks that this emerging technology presents.
This article explores the developing intersections between AI and some of the trends in property: where change is already underway; what may lie ahead; and what those in the property market – lawyers, property owners, property managers, real estate agents, councils and regulators – should be thinking about now.
Automation in conveyancing: incremental but inevitable?
Automation is already reshaping property transactions, particularly in conveyancing.
Some law firms are using tools to assist with tasks such as auto-populating documents, diarising dates, checking title conditions and generating settlement statements.
AI-enabled software is now capable of reviewing and summarising LIMs, cross-referencing records of title and flagging unusual encumbrances or instruments with growing reliability.
These systems don’t replace lawyers, but they do reduce time spent on routine checks and can lower the risk of human error. They also free property lawyers and advisors to provide more strategic and data-driven insights.
As the technology develops, we can expect AI models to be trained on increasing volumes of property work that was previously manual.
However, these changes also introduce new risks, such as misinterpretation, bias in training data or over-reliance on outputs without human review.
What this means for practitioners is the value-add is shifting.
Clients still want human connection and assurance, but delivered faster, with smarter tools, more cost effectively and at a lower margin for error.
Looking ahead, we may see automation extend into execution and lodgement processes.
While Land Information New Zealand (LINZ) maintains a tightly controlled Landonline system, there is scope for Agentic AI and the use of Application Programming Interface (API) based lodgement.
API allows different systems to ‘talk’ to each other without manual intervention – for example, between law firm practice management software and the Landonline registry.
This would allow direct integration with law firm systems, reducing duplication and improving efficiency.
Adopting such technology, however, will require careful consideration of issues such as responsibility for errors and how digital signatures are authenticated across platforms.
Smart contracts and registrable dealings
Smart contracts – self-executing agreements coded on blockchain platforms – are attracting increasing attention globally.
In real estate, initial proposed applications are digital contracts for deposit handling and automated settlement, triggered once conditions are satisfied.
Automated digital deposit processes are not yet widely used in New Zealand and smart contracts remain largely conceptual.
But the picture may shift as overseas regimes move.
In July 2025, the United States Congress enacted the GENIUS Act, providing the first federal framework for USD-stablecoins, where permitted issuers can provide tokens with an equivalent money value, backed up with high-quality liquid assets (such as cash or government backed Treasury bills).
This legislation now provides regulatory support for blockchain and smart-contract use cases in the United States, starting to make these applications commercially real.
Smart contracts remain largely theoretical in New Zealand mainly because settlement is tied to the Landonline system administered by LINZ under the Land Transfer Act 2017.
That framework is deliberately centralised, prioritising security and certainty of title over rapid innovation.
Title transfers must be registered through Landonline, using prescribed instruments, supported by practitioner certification, authority and identity checks.
There are also broader implications for dispute resolution.
A smart contract may be coded to perform an action upon satisfaction of objective conditions, but many property transactions involve subjective or disputed terms that are challenging to capture in code.
Unlike traditional contracts, there is no mechanism for interpretation or equitable adjustment. This means we will likely see new hybrid frameworks emerge with human oversight and coded execution and processing working in tandem.
It is clear that any move toward smart contracts or a blockchain-based land registry must act as both a shield and a springboard, protecting the integrity of property rights while enabling productivity gains and innovation.
Property tokenisation
In a property context, tokenisation refers to issuing digital tokens that represent fractional economic interests linked to real property, recorded and traded on a blockchain, while the underlying land remains recorded on the statutory titles register.
It is important to distinguish property interest tokenisation from a simple tenancy in common ownership share. A tenancy in common records each owner’s undivided share (for example, 25% each between four owners) directly on the record of title, and any transfer requires registration of a new instrument with LINZ.
With tokenisation, a custodian or special-purpose vehicle typically holds legal title, while investors hold digital tokens representing fractional economic interests.
Those tokens could be traded electronically without altering the underlying register.
In short, a tenancy in common gives purchasers direct legal ownership recorded on title; tokenisation gives them indirect, digitally recorded economic participation linked to, but separate from, the legal title.
Tokenisation then potentially could unlock new pools of capital for property investment – for example, providing fractional participation for first home buyers or providing developers with new fundraising routes.
Some Australian states and private operators have piloted blockchain-based registries and tokenised property platforms.
These operate as transactional/investment overlays: facilitating fractional investment, secondary trading, or settlement process improvements, but legal title still transfers only via the Torrens register, which remains the single source of truth with state-backed indefeasibility.
This dual-layer approach has enabled regulators to encourage experimentation while protecting the integrity of the titles system.
Australia has then tested overlays at the transactional and investment layer but, as is the case in New Zealand, transfer of titles is still effective only by registration on the statutory land registry.
Additionally, property tokenisation would be classified as a “financial product” under the Financial Markets Conduct Act 2013 and so would need to comply with that regime.
AI and land use regulation
Beyond transactions, AI has the potential to assist with complex regulatory interpretation – for example, zoning analysis, district plan overlays and consent pathways.
Systems can already map spatial data, match it to zoning restrictions and identify consent triggers. As natural language processing improves, AI tools may soon be able to read and summarise local government planning documents in formats that are more client-friendly.
This has real promise for developers, investors and local authorities, especially when dealing with ever-expanding urban overlays and natural environment risk zones.
One challenge is accuracy.
Planning documents are often detailed, multi-layered and context-sensitive. AI may struggle to accurately reflect policy nuance or anticipate how councils will interpret and apply provisions in practice.
A further consideration is the pace of regulatory change.
District plans are typically updated through formal statutory processes, while AI tools evolve rapidly. There is a risk that reliance on AI might outpace the accuracy of the regulatory datasets it is trained on.
Which would parties seek to rely on? Lawyers will play a crucial role in verifying AI-generated outputs against statutory requirements and council interpretations, and guide clients where automated summaries may overlook critical legal nuance.
Risks and responsibilities: legal practice and ethics
As AI becomes embedded in legal practice, questions of liability and competence arise.
If a legal assistant AI incorrectly assesses a title instrument, overlooks an encumbrance or produces an incomplete analysis of planning requirements, where does liability sit?
How closely should practitioners supervise automated advice?
The New Zealand Law Society’s current guidance recognises the value of technology but reinforces that lawyers remain accountable for the quality of legal advice.
For property practitioners, this underscores the need for robust governance of any AI-integrated systems and ongoing training in digital literacy.
From a legal compliance perspective, engaging AI tools raises significant privacy risks, particularly where those tools process personal information as part of property transactions, due diligence or client onboarding.
Under the Privacy Act 2020, agencies must ensure that personal data is collected, stored and used lawfully, and that any third-party AI tools comply with New Zealand’s privacy principles.
Risks include inadvertent disclosure, offshore data transfer without adequate safeguards and opaque algorithms making decisions using sensitive information without proper transparency or oversight.
Legal practitioners must conduct due diligence on AI providers and maintain strong contractual and technical controls to ensure privacy compliance.
Also worth noting is that under the Lawyers and Conveyancers Act 2006, reserved areas of legal work (such as the preparation of documents affecting legal rights) cannot be fully delegated to non-lawyers – or non-humans. As AI encroaches on that line, regulatory clarity will be essential.
Algorithmic bias presents another risk.
AI systems trained on historical legal data can replicate past inequities. While this is more immediately relevant in areas like criminal sentencing or immigration, property law could still be affected – for instance through automated risk scoring in lending or tenancy screening.
Legal professionals must ensure transparency in how AI tools operate, and advocate for fair design and technology development principles.
Looking ahead: practical considerations for lawyers
- Digital literacy is now a core competency. Property lawyers must understand how AI tools work – not just how to use them but also how to supervise outputs and verify them against legal requirements.
- Data security and integrity matter more than ever. Property transactions involve sensitive, high-value data. Adoption of AI tools must include strict safeguards to protect confidentiality, privacy and the accuracy of registrable instruments.
- Contracts may need to evolve. Smart contracts and AI-driven documents raise questions about enforceability, interpretation and dispute resolution. Property lawyers will need to be alert to these issues when drafting and reviewing documents.
- Practice management must adapt. AI tools require investment, ongoing updates, and ethical oversight. Law firms must establish frameworks for procurement, testing and quality control of AI-based systems.
- Regulatory engagement is key. The legal profession should actively engage with all stakeholders and industry participants – for example, LINZ, The Law Association, Real Estate Authority and law reform bodies to shape the future use of AI and smart contracts in the property space.
Conclusion
AI is not about to replace property lawyers.
But it will change what we do, how we do it and what clients expect from us. The greatest value for lawyers will lie in judgment, nuance and context – things machines still struggle to replicate.
New Zealand’s property law framework is conservative for good reason: the cost of error is high and the sanctity of title must be preserved.
However, within that framework there is space for responsible innovation. Those who embrace the tools thoughtfully will not only improve practice but help shape the future of the profession.
All emerging evidence indicates that we are not just experiencing a technological shift – we are entering a new phase in the evolution of legal services.
As a practitioner, I have seen the transition from paper to electronic registrations and significant expansion of computerised resources, from research materials to planning and mapping programmes.
Only two years ago, there was little to no use of AI technology in law offices whereas, for many of us now, it is difficult to conceptualise working without it.
As with the digitisation of land records in the past, those who engage early will be best placed to lead. The key is not blind adoption, but critical, informed engagement, bringing legal rigour to inevitable technological change.
Jonathan Simons is a director at PwC Legal
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