WHAT ARE LAND COVENANTS?

Building a home is certainly an exciting journey to embark on, it’s an opportunity to choose almost everything that will come together to create your dream home. And selecting a section is obviously the first step - a blank canvas that will allow you to start to imagine what could be.

But before getting too carried away, there are a few things that need to be considered. Every site in New Zealand comes with land covenants, which are basically rules and regulations around what is allowed to be built on it. Before purchasing a section, you should always review the covenants on the title, to ensure there is nothing that will get in the way of the home you are wanting to build.

What are land covenants?

A land covenant is a list of legally binding conditions that dictate what can and cannot be done on a piece of land. Registered on the title of a property, land covenants are established to have a certain amount of control over the final quality and look of the neighbourhood. For example, the minimum size a house can be, how many dwellings are allowed on each site, the type of materials to be used for cladding - it can even go into details such as whether garden sheds are allowed and what type of fencing can be erected.

There are two types of land covenants - positive and restrictive. Positive land covenants make the landowner do something (like build a single level house of a certain size) and restrictive land covenants stop a landowner from doing something (like owning more than three pets or making excessive noise).

Who creates them and how are they enforced?

So you may be wondering who actually has the final say on the land covenants placed on a building site or large development. Depending on the location, it could either be the original landowner, the developer, or the local Council - one of them will register the covenants on the title.

And there are a variety of reasons why they are put in place:

• To control the type of land use
• To have authority over the level of development
• To meet requirements of the Resource Management Act
• To ensure the neighbourhood is kept to a particular standard
• As a formal agreement so that all residents of the neighbourhood adhere to certain rules

Land covenants are a legal document that purchasers agree to when buying a property, and because of this they are enforceable. If a property owner breaches a land covenant, they could face legal action in the form of a claim or court order from any owner within a ‘mutual land covenant scheme’ (i.e. neighbours).

How could a land covenant affect my build?

While land covenants aren’t put in place to specifically get in the way of what you want to build on a site, some positive and restrictive land covenants could affect what it is you’re wanting to achieve.

For example, a covenant could dictate the section-to-house size ratio and if you’re building to a specific budget, this may mean you have to build a larger home than you had originally intended to - getting you into trouble further down the track. The land covenants list of approved cladding materials may also not be the finish you were looking for, meaning you have to compromise, or perhaps face another budgetary issue (as some cost more than others).

So the most important takeaway from all of the above information is to not only check what land covenants exist on the title of the section you’re looking to purchase in order to build a new home, but also what they actually mean for the design and build itself.

And often the best way to do this is to speak to an experienced, reputable builder (like us!) before you sign on the dotted line - they’ll be able to explain exactly what considerations need to be made so you don’t get caught out later on.

Disclaimer: We always recommend talking to your lawyer regarding land covenants before making any decisions on purchasing property.