Recently we wrote about the proposed changes to the Resource Management Act: this is expected to permit intensified developments across much of New Zealand.
If you are thinking of subdividing and then selling part of your land, you may want to limit or restrict what a future neighbour can build right next door. While that may disadvantage someone intending to develop, a covenant will benefit you if you want to prohibit that, and it will give you the certainty that a future neighbour will be bound by certain rules.
While land covenants are commonly registered as part of modern residential subdivisions, if you plan to subdivide your own land, or where you and your neighbour agree that you want to register a covenant, you can register a covenant with the help of your lawyer.
A covenant is a contract entered into between two landowners and registered against their titles. Unless the covenant provides that the obligations only last for a fixed period, land covenants usually “run with the land” forever so that they bind future owners.
Land covenants also usually include remedies or penalties that can be pursued where one owner breaches their obligations to the other, and the process that should be followed where a complaint or dispute arises.
Common examples of covenants include:
A minimum building setback requirement can prohibit someone from building within a certain distance of your boundary.
Ensuring that taller buildings are kept further away from your property is one way to maintain sunlight, views or the general amenity of your property.
Future subdivision or land use:
A covenant can also stipulate that no further subdividing is allowed, or that a landowner will not carry out a commercial activity from the property.
Rules around dwellings and construction:
Covenants can also stipulate minimum floor areas, or contain restrictions on the final look or shape of new buildings.
This can be achieved by including controls on the types of construction materials, or by prohibiting accessory dwellings or pre-fabricated or relocatable homes.
Rules protecting amenity generally:
Covenants can contain rules around fencing, or the height of new buildings or vegetation.
A word of warning: because covenants usually run with land, they last forever, unless they are removed. Covenants can be very difficult to remove, and they can only be varied or removed where all parties who are bound by the covenant agree to its variation or removal. Formal written consent is required and there are costs associated with variations or the removal of a covenant.
This means that drafting the terms of any covenant is critical because there is no guarantee that you will be able to remove a covenant, once registered.
If you think you want to register a covenant or want to explore your options, please give us a call or email and we'll help you work it out.