First Home Buyers

Shopping around for your first home can be confusing with different properties coming with their own sets of rules. Make sure that you are aware of what you’re buying in to and whether that aligns with your goals for the future.

Each property comes with a Record of Title, which proves the ownership of land and the rights and restrictions that apply to land in New Zealand.  A Title holds other information, such as lot numbers, how big the section is, and whether there are any covenants, easements, caveats, or other instruments registered.

There are several types of title in New Zealand, and we have outlined the most common types below – fee simple, cross lease, and unit title.

Fee Simple/Freehold

A fee simple title (also known as a freehold title), is where the owner of the land has full control and freedom not only of the dwelling, but also the land surrounding it.  The owners can enjoy the freedom of permanent and absolute ownership of the land.

A fee simple title is one of the most common titles we see when dealing with property transactions, and also one of the most desirable.

The owner of a fee simple title does not have any restrictions on their use of the land, except for any restrictions that fall within any land covenants registered on the title, and any local body (Council) requirements.

Cross lease

This type of Title is fairly common and, in fact, Christchurch has been referred to as the “Cross Lease Capital of New Zealand”.

Flats or townhouses are most often on a Cross Lease Title.

With this type of Title, you own an undivided (undefined) equal share (with other flat owners) in the land on which all the flats are built.  You also have a registered Lease giving the owner of a particular flat the exclusive use of the flat, and the land that goes with it.

The Flat Plan on the Title defines the outline of the buildings, the flat numbering, the land that goes with each flat, and any shared or common areas (e.g. a driveway).

The registered Lease contains restrictions on what you can do at the property. For example, any building work undertaken must be consented to by all other flat owners, any change in the outline of the buildings on the land must be exactly reflected on the Flat Plan, and you cannot block any common areas (such as a driveway or a turning area).

Unit titles

Unit Titles are also known as ‘Stratum in Freehold’ titles. These types of titles are common in apartment complexes, or townhouses.

Owners of a Unit Title property own a defined part of a building (such as an apartment), and share common areas such as lifts, lobbies, or driveways with other owners.

When you purchase a Unit Title property, you automatically become a member of the Body Corporate. All unit owners in a Unit Title property make up the Body Corporate, and they must hold an annual general meeting at least once a year to discuss matters and vote on decisions affecting the complex.

The Body Corporate pays for any maintenance or repairs it carries out by imposing levies on unit owners. These levies cover all regular costs of the common areas such as insurance, cleaning, gardening, any fees for contracted professional, and other ongoing maintenance.

Typically, there is one insurance policy covering all of the units in the development, however normally Council rates are billed separately to each unit owner.

Unit Titles are ruled by a set of rights and obligations set out in the Unit Titles Act which can be varied to suit the particular development. A change to the rules for a set of units can be registered on the Title. Rules are aimed at enabling peaceful cohabitation between unit owners and include things such as limiting the types of activity you can carry on at the property, limiting what alterations can be completed on the Units, colour schemes for exterior paintwork, among other things.