Land Covenants

If you are buying a section in a subdivision, it’s more than likely the property will have registered land covenants. Land covenants are restrictions registered over a parcel of land and will be noted on the property’s certificate of title. These restrictions will bind all future landowners by placing limits and restrictions on what a landowner can do on their land.

Land covenants are typically registered when a landowner subdivides a parcel of land. Landowners commonly want to place restrictions on the use of land when they decide to sell it, particularly if they are retaining some neighbouring land.

The purpose of many restrictive covenants is to help maintain the long-term amenity values of a subdivision and to keep close ties with the Resource Management Act which aims to promote the sustainable management of natural and physical resources.

Typically a land covenant will contain restrictions on how a property may be developed, and include provisions such as specifying building materials which must be used, specifying the colour and shape and size of buildings, requiring building designs to be submitted to a building committee for approval, as well as containing restrictions against further subdivision, or increases in height or increases in density.

If you are buying a section (or any property for that matter) you should be aware that some covenants contain what are called liquidated damages provisions. These provisions can provide penalties which, for example, if you build your house with material restricted by the land covenant, you could be immediately obliged to pay tens of thousands of dollars to your neighbours.

If there is a land covenant registered over the land you are considering buying, it’s essential that you fully understand the nature and effect of the restrictions contained in the covenant – we can help you with this.