Title, Subdivision & Settlement
What you own, and where it stops.
Three things sit behind every property transaction: what the title actually says you own, whether that can be changed, and the day it passes to someone else.
Most buyers look at the house. The title is where the surprises live — a right of way across the drive, a covenant on what you can build, or a plan that no longer matches what is standing on the land.
Ownership
Four kinds of title, and they are not the same thing.
Fee simple
Freehold. The fullest form of ownership: the land and everything on it, subject only to what is recorded against the title. The simplest to buy, sell and borrow against.
Cross-lease
You own a share of the whole site with the other owners, and lease your flat from all of them, including yourself. Common in Auckland, and the one that most often causes trouble.
Unit title
You own a defined unit plus a share of common property. There is a body corporate, there are levies, and there are rules. Apartments and many townhouses.
Leasehold
You own the building but not the ground under it, and you pay ground rent that is reviewed periodically. The price reflects that, and so should your expectations.
The common trap
When the plan no longer matches the house.
A cross-lease title carries a plan showing the footprint of each flat and the areas each owner has exclusive use of. The plan is part of what you own. If the buildings on the ground no longer match it, the title is defective.
How it happens
Innocently, usually. A previous owner adds a conservatory, decks over the patio, puts up a carport or extends a bedroom — and never updates the plan. Years pass. Nobody notices until someone sells.
Why it matters to you
A buyer’s lawyer will find it. Lenders can baulk at it. Fixing it means a new survey, a new plan, and the agreement of every other owner on the site — which is where it becomes slow and expensive.
When to deal with it
Before you sign, if you are buying. Before you list, if you are selling. Discovering it a week before settlement is the worst and most costly moment to find out.
On the title
What else is recorded against it.
- Easements — rights over the land, usually a right of way, or drainage and services crossing it. Someone else may be entitled to use part of what you are buying.
- Covenants — restrictions on what you can do. Build height, materials, fencing, sometimes how soon you must build at all. Common on newer subdivisions.
- Mortgages — registered security, discharged on settlement.
- Caveats — a claim by someone else to an interest in the land. It will stop a sale until it is dealt with.
We read these before you are committed, and tell you plainly which ones will affect how you actually use the property.
Subdivision
Turning one title into two.
Subdividing is a council process before it is a legal one. Consent comes first, conditions are attached to it, and the new titles only issue once those conditions have been satisfied and certified.
Resource consent
The council decides whether the subdivision can happen and on what terms. Conditions commonly cover access, services, stormwater and contributions.
Survey and scheme plan
A licensed surveyor sets the new boundaries and prepares the plan that will become the new titles.
Satisfying the conditions
The physical and legal work the consent required — which is usually where the time and the money go.
New titles issue
Once certified, the plan is deposited and separate titles are created. Only then can the new lot be sold or mortgaged on its own.
Boundary adjustments
Moving a line between two existing titles rather than creating a new one. Smaller, but it still needs consent, a survey and the neighbour’s agreement.
If you are buying a section that is subject to a subdivision not yet complete, what you are really buying is a promise. We check what has to happen before the title exists, and what happens to you if it does not.
Settlement
The day it changes hands.
Settlement is the point where the money moves and the title transfers. It is handled between the lawyers electronically, and it either happens cleanly or it becomes very stressful very quickly.
- Before the day: final searches of the title, settlement statement and apportionment of rates, loan funds in place, insurance arranged from the right date.
- On the day: funds released, mortgages discharged, the transfer registered, and the keys released once settlement is confirmed — not before.
- Pre-settlement inspection: your chance to check the property is in the condition you agreed to buy it in, and that chattels are still there.
- If it cannot settle on time: the agreement sets out what follows, including penalty interest and notices. We tell you where you stand rather than leaving you to find out.
After settlement
Some obligations outlive the transaction.
Covenants bind you going forward. Consent conditions may still have work attached to them. Bonds may be held until something is finished. On a unit title there are levies and body corporate rules from day one.
We set out what carries on after the keys are handed over, so none of it arrives as a surprise.
How we can help
We can assist with the following.
- Title review: reading the title and everything recorded against it, before you are committed.
- Cross-lease and unit title issues: identifying defects, and the work required to put them right.
- Easements and covenants: what they permit, what they prevent, and whether they can be varied.
- Subdivision: the legal work alongside your surveyor and planner, and satisfying the conditions so titles can issue.
- Boundary adjustments between neighbouring titles.
- Settlement and transfer, including buying a lot before its title exists.
- Post-settlement obligations and ongoing conditions.
Questions
Frequently asked questions.
What is a cross-lease, in plain terms?
You own a share of the whole section together with the other owners, and you lease your own flat from the group — which includes you. It is an arrangement from an era when subdividing was harder, and a lot of Auckland housing still sits on it.
What makes a cross-lease title defective?
The buildings on the ground no longer matching the plan on the title. A deck, a conservatory, a carport or an extension added without updating the plan is enough.
It is extremely common, and it is almost always discovered by the buyer’s lawyer at the worst possible moment.
Can a defective cross-lease be fixed?
Usually, but not quickly or cheaply. It needs a new survey, a new plan, and the agreement of every other owner on the site. If a neighbour will not cooperate, that is the real problem rather than the paperwork.
Deal with it before you list, or before you sign.
What should I know before buying a unit title?
What the levies are and what they cover, what the body corporate rules allow, what is in the long-term maintenance plan, and whether there is anything in the minutes about building problems or a pending special levy.
You are buying into a shared financial arrangement as much as a home.
Someone has a right of way over my driveway. Can I stop it?
Generally no — a registered easement runs with the land and binds you whether or not you knew about it. It can sometimes be varied or extinguished by agreement, which means negotiating with whoever benefits from it.
Better to know it is there before you buy.
How long does a subdivision take?
It depends almost entirely on the council and on the conditions attached to the consent, so an honest answer early is usually a range rather than a date. The legal work is rarely the slow part.
We tell you what has to be satisfied before titles can issue, so you can see where the time will actually go.
Can I buy a section before its title exists?
Yes, and many people do on new subdivisions. What you are buying is a promise that a title will be created.
The things to understand are what still has to happen, how long you are committed for, and what your position is if the title never issues or issues late.
What happens if settlement cannot happen on the day?
The agreement governs it. Typically the defaulting party faces penalty interest, and the other side can issue a settlement notice that sets a deadline with real consequences.
If you can see a delay coming, tell us early — there is far more that can be done before the day than after it.
When do I get the keys?
Once settlement is confirmed, not before. Agents release keys on confirmation from the lawyers that the money has moved and the transfer is done.
What is a caveat?
A notice registered by someone claiming an interest in the land. It does not decide who is right, but it stops the title being dealt with until it is removed or resolved — so it will hold up a sale.