Although property ownerships can be complex, the following are several of the most common ways that land titles can be held.
Fee Simple title
Most land in New Zealand is owned with fee simple or freehold titles. This means that the land stands alone, without being tied to anyone else’s interest. It can be mortgaged, it may have rights over other land attached to it (easements) and it may be subject to the rights of others, for example to give a neighbour a right of way or the right to run pipes under your land. Generally, this is the type of ownership that applies to a residential section with a house on it.
Cross leases exist when two or more people own the same piece of land and then lease parts of that land to one of the owners. This type of ownership is frequently seen in single level blocks of flats or sections that have twp or more separate houses on them. It is important to get your lawyer to check the title when you buy a cross leased section to ensure that there are no problems with the lease or the title. You will also need to check with your lawyer if you want to make any alterations to the building that might alter the plan of the building on the lease. This type of ownership is not really suitable for large blocks of apartments.
In this case the actual unit, apartment or shop is owned outright by the owner. Unlike a cross lease it is not leased from a co owner. You have your very own title to the property. So far so good. In a block of apartments or home units there are areas of common use. These might include the stairs, lifts, parking areas or entrance ways and the building itself. All of the owners of the individual units are part of a “body corporate” It is the body corporate that is responsible for such things as maintenance, insurance and to comply with any requirements of the local authority in respect of the common use areas. All owners are required to contribute to the body corporate by the payment of fees necessary to carry out these functions.
There are different ways in which people can purchase the right to use an apartment or unit in a time share scheme. The principle is that you can buy the use of the unit for a defined period of time each year. This is often achieved by the purchase of a share of a unit title (see above) and then leasing that unit for a specified number of weeks in the year from the other owners. Legal advice should always be sought, (as in all other property purchases) from a lawyer before you sign up.
Need further advice or assistance?
For a more detailed explanation of ownership relating to your particular sale or purchase please contact us for more information or call 0800 PPTYLAW (0800 778 952) or +64 6 3705102 to speak to one of our property law specialists today.