Subdivisions and the crucial role of your lawyer
On 20 December 2021 the Resource Management (Enabling Housing Supply and Other Matters) Amendment Act 2021 was passed into law. This amendment to the Resource Management Act (RMA) allows Councils in the larger cities of New Zealand to change their density planning rules so that more medium density homes can be built. Medium density housing includes developments such as terraced housing or apartments within a building of four storeys or less.
Although we are still waiting for these changes to filter through to the Auckland Unitary Plan, it should be easier for property owners to subdivide their land whether you are a homeowner wanting to sell off part of your backyard or a property developer carrying out small or large scale multi-lot subdivisions.
The subdivision process can still be daunting especially for those new to the process. A subdivision involves many professionals including planners, surveyors, engineers, builders, architects, accountants and lawyers, who all have their part to play. Often the lawyer is not consulted until the subdivision is well underway but to avoid unnecessary complications it is highly recommended that you seek legal advice early on.
So when should your lawyer be involved?
Initial Concept Plan and Applying for Resource Consent
Once a concept plan has been drawn up by the surveyor and resource consent applied for, your lawyer should review the head title for any notations which may impede the subdivision such as covenants restricting the number of dwellings per lot and existing easements preventing the vesting of land.
Gaining Resource Consent
Your lawyer should review the resource consent and conditions to be imposed by the Council and start planning the new title documentation. Work now starts on implementing the conditions of the consent, including the payment of development contributions, approval of engineering by Council and completing all physical works on site.
Section 223 - Approval of Survey Plan
At the same time, the surveyor submits a survey plan to Council for approval under Section 223 of the RMA. Your lawyer should work closely with the surveyor to review the draft survey plan. The survey plan may be amended a number of times before Council approval is given and your lawyer should ensure they are aware of any changes to the final approved plan.
At this stage, your lawyer will be finalising the subdivision documentation in accordance with the approved survey plan including preparing compulsory easements (those required as a condition by Council) and voluntary easements (as requested by the owner and surveyor). Easements may also be required for telecommunications, gas and electricity supply. If so, your lawyer will also prepare this documentation in accordance with Chorus and Vector’s specific requirements.
Your lawyer will also work closely with you in preparing any land covenants you wish to be included such as height restrictions to perhaps protect your sea view if you are subdividing part of your land or detailed building covenants if you are a developer wishing to ensure that a high standard of building is maintained by all the owners in a multi-lot subdivision.
Section 224c and Consent Notices Issued
Once Council is satisfied that all or any of the conditions of the subdivision consent have been complied with, a certificate under section 224(c) of the RMA will issue together with any consent notices required to be registered on the records of title. The Council or surveyor will lodge the Section 223 and 224(c) certificates with Land Information New Zealand (LINZ).
Your lawyer and surveyor will now work together to ensure that the subdivision documents are lodged with LINZ as soon as possible. Often the preferred option is to lodge survey and new title documentation together via fast–track which aims to reduce the processing time. Time-frames for the deposit of the survey plan and issue of new records of title varies according to the complexity of the subdivision but a simple subdivision is presently taking about 10–15 working days.
Selling the New Lots
Many people subdividing land enter into a sale and purchase agreement with prospective purchasers before the new Record of Title issues. This can cause problems if the agreement has not been drafted correctly. You should seek advice from your lawyer early in the process to assist with drafting any sale and purchase agreement to ensure that the necessary conditions and clauses have been inserted.