The Law Commission says new legislation is needed to provide better protection for people buying and selling property.
A report from the commission, tabled in Parliament, recommends replacing the 58-year-old Land Transfer Act with modern legislation.
Commissioner John Burrows says that buying, selling and leasing land is now done electronically but that the existing act does not support such dealings.
He says it contains some provisions that are hopelessly outdated, and it needs to be rewritten in plain English.
Professor Burrows says there have also been problems with people obtaining mortgages on land they don't own.
The draft act requires lenders to take reasonable steps to check the identity of borrowers.