Understanding your Record of Title – Consent Notices, Covenants, Easements and Encumbrances explained
When purchasing or developing property in New Zealand, it is important to understand what is recorded on the Record of Title.
The Record of Title is the legal document that records the registered owner of a property and the land area. Importantly, it also sets out any interests or restrictions that may affect how the land can be used, as well as any rights that other parties may hold over the land or rights that a registered owner may have over adjoining land. Common instruments recorded on a Title include consent notices, covenants, easements and encumbrances, each of which can have a lasting impact on your property rights and obligations.
Consent Notices
Consent notices are conditions imposed by a council as to how the land is used and are issued as part of a subdivision or resource consent. Consent notices are registered on the Title at the time it is created and remain attached to the land, binding all future owners.
It is important to understand the conditions set out in a consent notice to ensure you can meet any ongoing obligations and are fully aware of how these conditions may impact your intended use or development of the land.
Common examples
Landscape maintenance requirements - for example that the owner must establish and maintain landscaping in accordance with approved subdivision plans.
Building restrictions - for example that a fence cannot be built over a specified maximum height or that certain materials must be used in the construction of any dwelling.
Covenants
Covenants are legal obligations registered on the Title that restrict certain activities or require specific actions, affecting how a property may be used. In subdivisions, developers commonly register the same set of covenants across multiple lots to help maintain a consistent standard of housing and landscaping and preserve the overall character of the development.
Common examples
Time constraints on construction - for example that a dwelling must be erected within 12 months after building consent is granted.
Restrictions on the size or shape of the dwelling - for example minimum floor areas.
Requirement for the developer to approve plans and specifications for any dwellings prior to the commencement of construction.
Easements
Easements record the legal right for one party to use another party's land for a specific purpose. Easements remain in place on the Title and bind all future owners.
Easements can exist between neighbouring landowners, such as Lot 2 having the right to drain sewage over part of Lot 1. Alternatively, easements can be “in gross” meaning they benefit a person or entity that does not own adjoining land, such as a local council or utility provider for services like electricity, water or gas.
Easement instruments will also record how the easement facilities are to be maintained and repaired and who is responsible for costs.
Common examples
Right of way - allowing access through a neighbour’s land (such as accessing a back unit property through using the driveway that is part of the front Unit's land)
Easements for services - such as electricity, water, telecommunication lines.
Sewage and water easements - permitting one owner to drain water or sewage through pipes on neighbouring land.
Encumbrances
Encumbrances are legal restrictions or interests registered on the Record of Title that record another party's rights or claims over the property. These can limit how the property is used or transferred. If you are planning to sell or transfer the property in most instances an encumbrance will need to be discharged beforehand.
Common examples
Easements and covenants where these are not otherwise documented in an easement or covenant document as set out above.
Residents Association – where a landowner must belong to a resident’s association and be bound by the rules of that association.
Summary
Whether you are a first home buyer, seasoned investor or property developer, understanding all registered interests on your Record of Title will help you understand your rights and restrictions to how you can use the property. To find out more information as to how we can assist you, please contact our property team on 03 379 3880.
