Converting cross lease titles to fee simple

Rotorua is a wonderous place, known for its cultural significance to Māori, its geothermal activity, many lakes and tourism (to name but a few). From those seeking adventure, mountain biking in the redwoods, or taking some time to bask in one of the many day spas, Rotorua has something to offer everyone. For those seeking to permanently secure a foothold in Rotorua, we’ve collated a selection of relevant factors for the prospective purchaser to consider when looking at Rotorua residential property: Geothermal Activity Geothermal / volcanic activity is part of the natural landscape and surrounds of Rotorua. Undertaking due diligence in this regard at the outset will help to mitigate unexpected surprises. This includes checking that you will be able to secure insurance (without exception). Note: Insurance is critical if you are obtaining a mortgage. Geothermal Bores While it may seem unusual, some properties in Rotorua are heated through access to a geothermal bore. If the prospective property you are looking at purchasing does have access to a geothermal bore, we suggest you check matters such as: Whether there are any known issues with the supply/users of the bore; The maintenance contribution you would be liable to pay (including the amount and frequency); Who manages the bore. For example some areas have a geothermal bore association who meet on a regular basis; and How to transfer the right to use the bore, if applicable. Water Supply The Rotorua Lakes Council (Council) has two methods of charging for water use: Unmetered properties – these properties are charged a set annual charge included in their general rates. Metered properties – these properties receive separate quarterly invoices, based on the actual volume of water consumed. Council operates 10 water supplies for urban, rural residential and farming supplies. These supplies do not receive any funds from general rates and are funded through water charges. You should check if water use for your property is metered and if it is subject to any additional water charges. Air Flight Path Rotorua has the benefit of a domestic airport in Ōwhata. Properties that are located near the airport (where applicable) may be in areas of high Airport Noise, this will be noted on the Council file. The airspace above the property may also be designated on flightpaths to the airport, this will also be noted along with any restrictions such as the height of trees and property or the use of drones. You should check whether the property you are looking to purchase is subject to Rotorua Regional Airport Noise Control and Mitigation requirements and if there are any restrictions associated with this. Jetty’s If you are looking at buying or selling a home with a Jetty ensure you understand your obligations. This includes the transfer of the resource consent (if applicable), the resource consent terms and the costs. Fireplaces and the ‘Point of Sale’ Rule Check whether the property falls within the Rotorua Clean Air ‘airshed’ which requires non-compliant fires and wood burners to be decommissioned or removed. If the home has a solid fuel heater and it is not on the list of compliant solid fuel heaters it must be decommissioned with a certificate filed with Council by an appropriately qualified person. It is a requirement at the time of sale, (which is a seller’s obligation). Leasehold Titles Sometimes, you will come across some well-priced lake-front (or near to) properties that are comparably lower than some surrounding homes and the \'good price\' may be attributed to those properties being “leasehold” titles. A leasehold, generally speaking, means you have a “leasehold” title that is subject to a lease which includes the leasehold owner paying ground rent. There is someone else who owns the “fee simple” or “freehold” of the underlying land (the ‘Landlord’ or Lessor) who you pay that rent to. You only have the right to exclusive use of the property for the time specified in the lease (subject to any renewals). The lease should be carefully reviewed and understood by you prior to purchasing as your use and occupation is subject to the terms of that registered lease. General If you are considering purchasing (or selling), seek legal advice prior to signing an agreement (this is to ensure that your I’s are dotted, and your T’s are crossed). To protect your interests, we can assist in reviewing your agreement to ensure the appropriate clause(s) are included in the sales and purchase agreement. If you are looking to secure your own piece of paradise in Rotorua, reach out to our property team for legal advice, prior to signing the agreement. As the saying goes, it is much easier to negotiate before you sign!

Land covenants are very commonplace in modern subdivisions and often impose significant restrictions on the way a property can be developed and used, now and into the future (sometimes indefinitely). While usually intended to promote and protect the amenity of subdivisions and preserve property values in the years to come, covenants can stymie development, prevent neighbourhoods from moving with the times and create difficulties for owners trying to renovate and extend or sell their properties. Common issues are: Requirements that the developer or other third party approve in writing any plans and specifications for construction of buildings on the land. Often these requirements are overlooked, and approval is not actually sought or there is nothing in writing to show that this requirement was complied with. This causes issues when the property is sold as a purchaser inherits (and could be required to fix) any covenant compliance issues when they buy a property. These requirements can also be written in such a way that it’s not clear whether approval has to be obtained for the initial construction of buildings on a property, or whether the obligation is ongoing and approval must be obtained for any new additional buildings (like a tiny home or extra garage) or changes to original buildings - which would cause further issues if the developer no longer exists. Prohibitions on subdivision or the number of dwellings that can be constructed. It is very common for covenants to specify that only a single dwelling can be constructed on a property, which can prevent an owner from redevelopments such as converting their property into a home and income and inhibits intensification of residential land. Inflexible material requirements, like obligations to use only certain types of cladding, which have become obsolete or problematic over time. These requirements can also prevent the use of new superior materials and building innovations. It is possible to put a time limit on covenants and to update or remove them, but the process of doing so (if not provided for in the original registered covenants) can be painful. Updates or removal can be done by: Obtaining the consent of all owners in the affected subdivision - but often this is simply not practical due to the number of impacted owners or the risk of one or more owners refusing to cooperate or requiring some sort of payment to do so. Making a Court application for an order under sections 316 and 317 of the Property Law Act 2007. Court proceedings can be costly and lengthy, with no guarantee of success. To be successful, an owner would have to convince the Court that: There has been some relevant change (such as the use of the land or in the character of the neighbourhood) which means that the covenant should be modified or removed; The continuation of the covenant as is would impede the reasonable use of the property; and There is no-one who will be substantially detrimentally impacted by the modification or removal of the covenant. If you are considering buying, selling, developing or redeveloping a property that you know or suspect is affected by covenants, it is prudent to check the property’s title and understand the impact the covenants may have on your plans and what your options. Our property team can assist with this, please get in touch.

Holland Beckett is pleased to announce that Hilary Anderson has joined the firm as Special Counsel.    Hilary is a specialist property and commercial lawyer and joins our property and commercial law practice working closely with Dean Thompson and his team.   “The appointment comes at a time of significant momentum for the firm as we grow our commercial and development practices,” says Dean Thompson, Partner at Holland Beckett. “Hilary has always impressed us in past dealings with her common sense and commercial approach. She will be a great addition to the team.”    Hilary enjoys a wide variety of work for private clients, property developers and commercial clients, with expertise in residential and commercial property transactions and finance, property development, conveyancing, subdivisions, commercial leasing, franchising and contract matters. She also has a special interest in trusts, asset planning and protection with significant experience in complex or large estates. Named as one of New Zealand Lawyer’s Rising Stars in 2022, Hilary is a driven but straightforward and approachable lawyer.   Born in Ōhope, Hilary has strong connections to Whakatāne and the Eastern Bay of Plenty. She has called Tauranga home for more than a decade and has strong relationships and an incredible reputation in the community.    Holland Beckett is delighted to have identified a talent and to have her join the team at a time of growth. The Bay of Plenty based firm has almost outgrown their current Tauranga premises and will move to new offices in the CBD next year, marking the next phase in the firm\'s success. Dean Thompson adds, “we have always got room for good people.”   Please reach out to Hilary for any property or commercial enquiries hilary.anderson@hobec.co.nz or 07 571 3836.