Subdivisions – or, more to the point, the rules that live alongside them – have been grabbing their fair share of headlines lately.

According to media reports, several residents who bought sections in a local development are upset plans, including amenities, look set to depart quite markedly from the initial master plan.

I can understand the disappointment for purchasers when plans and artists’ impressions don’t roll out into reality. When this scenario plays out, many buyers are shocked to discover that the writing, in most cases, was on the wall.

If you take nothing else from the following, and you are buying land in a development, remember this: it is imperative you do not go anywhere near the dotted line until you go through the entire sales and purchase agreement with a fine-tooth comb, and are crystal clear on every single clause and the implications of each.

The first, fundamental reality prospective buyers must get their heads around is that when you buy into a subdivision, you buy into rules and restrictions – whether you like them, or not. These include not only Council rules, but the developer’s land covenants – the discretionary elements those creating the subdivision get to call the shots on.

Rights relinquished

Searching for a section can be hard work, and frenetic. Often the seeds of later disappointment are sown when busy buyers don’t, at the outset, take in and appreciate the detail and implications of the developer’s rules. Or, critically, the fact that in the vast majority of cases they’re signing a contract that includes a “no objection” clause.

That’s right: buyers often relinquish the right to take issue with the developer over any subsequent changes that are made to the subdivision, including amending, or shelving, original plans and amenities.

Buyer’s regret is not the sole domain of subdivision newbies, either. We’re also seeing people looking to build again in a different development, assuming that the rules are all more or less the same wherever you go. Ah, no. To give you an idea of just how wildly varying land covenants can be, in some subdivisions they’re encapsulated in just a single A4 sheet; in others, we’re talking 25-odd pages – with, what’s more, links to further specifications, like design plans.

What can covenants cover?

The simple answer: lots. Typically, for example, relocatable houses are forbidden in most, but not all, subdivisions. In some developments, anything goes fence-wise as long it complies with the District Plan; in other subdivisions, however, fencing specifications can be highly prescriptive with restrictions on design, colour, and materials.

One person’s idea of a hot, on-trend cladding is another’s eyesore. Take corrugated iron. Even pricey, architectural house designs sometimes use it as a key feature material – which is all well and good, until you discover the subdivision you’ve committed to has an all-out ban on it.

Size is everything With the “tiny house” movement gaining momentum and others also favouring smaller, more sustainable dwellings, covenants specifying minimum house sizes can scupper design dreams from the get-go.

Some subdivisions carry a rule that buyers’ homes must cover a certain percentage of the section; while others ban houses under a set square meterage. There are developers who insist they approve every set of house plans before they’re submitted to Council, to ensure the look and size of the building is in keeping with the subdivision. 

It’s also very common that buyers be required to complete their build within a strict timeframe. And, then, there are trees, the size and species of which are partly dictated by the District Plan, but developers can go further. Some have a relatively small, defined list of trees that can be planted, and a total ban on any other types.

As I mentioned earlier, there are few subdivision sale and purchase agreements that don’t include the “no objection” clause, a covenant which exists forever. So, that not only forbids you challenging the rules, it can also mean, for example, you can’t fight the fact the promised community pool doesn’t come to pass, or that an existing communal park with barbecue facilities is demolished to make way for more housing.

There are some circumstances under which if every single owner within a subdivision challenges the same issue – an extreme rarity – that you might get some legal traction. Where there is not unanimity, trying to break these clauses through the Courts is typically an uncertain, costly and protracted process, so very few bother.

I recently bought a section with my husband in a subdivision. I have an advantage, given my line of work: I know all of the local subdivision rules and idiosyncrasies like the back of my hand. Even still, it was a careful, methodical exercise, reconciling our dreams with the sections we considered, and the covenants that accompanied them.

Do your homework

If you’re in the market for land, take the time to talk to a property lawyer in advance of your section hunt – and certainly before you get your heart too set on anything. Make sure your legal adviser knows the local subdivisions very well, and can talk you through both the Council and developers’ covenants, what they mean and all of their nuances.

If you, as many do, have bought into a subdivision only to discover you can’t easily live with the rules, but you’re bound by the usual “no objection” clause, you probably have a couple of choices: move out and move on, a little wiser; or, do your best to make peace with the realities you’ve bought into.

RELATED: 

•   •  Hard Case legal column is back! Posted: 12 June 2018

•   •  Home truths Posted: 07 July 2018

Please remember: the information in this column is designed as a general guide only and should not replace specific legal advice on a particular issue.
www.aspiringlaw.co.nz

Janice Hughes is a Director of Aspiring Law. If you have questions or feedback about this article, please contact Janice on 03 443 0900, or email janice@aspiringlaw.co.nz

Click to read the Wanaka Sun

Enlarge screen by double-clicking on the front page 

View all earlier editions of the Wanaka Sun here