Is there a tricky registered interest on a property title?
Contact Nz property law expert, Carmen Franich for assistance.
19 October, 2019 | Carmen Franich
The purpose of this article is not so you can give prospective purchasers legal advice. We strongly recommend you steer clear of that. But we hope that this article will give you a better understanding and will help you identify some potential red flags when you are listing a new property and/or drafting the description of the property to accompany your listing.
Please note that this is not an exhaustive list of possible interests and the title is not the only thing that may cause issues (e.g. the contents of LIM reports can also contain restrictions). However, in this article we will address some of the most common interests found on titles.
Easements usually grant a right for the owner of land to do something on someone else’s land. The land that has the benefit of the right is called the dominant tenement/land. The land that the easement runs over or across is called the servient tenement/land.
On a title you will see easements either referred to as “Appurtenant hereto…” (which means this is the dominant land) or “Subject to” (the servient land). The most widely used easements create rights in respect of water supply, drainage, electricity and rights of way.
Easements between neighbours are the most common. However, there are also easements in gross. These usually refer to companies or Council who may need access to the land to provide a service, e.g. Vector installing underground cables.
Important things that could catch you out:
Covenants are contained in other documents such as a transfer. Usually a developer might register them on the title so that once the land is sold to builders; the builders have to comply with certain requirements. Examples are the types of materials that the dwelling is made from, the height the dwelling goes to so that other houses in the development are not impeded.
Important things to be aware of:
A Consent notice is a document registered on a title by Council, generally, as a condition of a subdivision. It will contain restrictions or obligations that are placed on the property owner.
Examples are that you can only build a dwelling in a certain area, you cannot remove certain parts of the surrounding bush, or you must fence a certain area of the property if you wish to keep animals on the property etc.
Important points to look for:
A caveat gives the person who registered it (the caveator) the ability to protect an existing right or claim they have in respect of the property. The main class of caveat we deal with is a caveat against dealings, basically meaning the land cannot be mortgaged, sold or transferred without first removing that caveat.
Important things to note:
Lease instruments registered on cross lease titles are vital documents in respect of the property. They govern the relationship between the owners of all of the properties within the cross leased land. There are generally standard forms of lease that are used, however, you should always search the lease document as it can affect how you should amend the fine print of the standard ADLS agreement for sale and purchase. The lease states what types of activities the owner is allowed to undertake. It also defines what works the owner must obtain consent from the other cross lease owners for.
Important things that you should check:
Smith and Partners offer a title report service. For a small fee which can be passed on to the vendor, Smith and Partners will search the title and any interests and report to you as to the implications for your client vendor.
18 July, 2018 | Carmen Franich
19 October, 2019 | Carmen Franich