Let’s be real here. New Zealand has a housing shortage, and the Government knows this. That’s why they’ve pledged to re-vamp the restrictive Resource Management Act 1991 (RMA) into three new acts sometime soon (read more about that here). But while the RMA waits for its D-day, what is the Government doing in the meantime to help get Kiwis building houses?
A new amendment, a ‘relaxation’ to the bill if you will, now allows most sections to have three houses of three storeys built on them without needing a resource consent. Helping remove the hoops that developers and landowners once had to jump through, this change hopes to bring some relief to the country’s housing woes. This decision is also unique in the fact that it has also been fully supported by the major opposition party… that’s something we really don’t see often.
Before you start planning that third storey add on (or cashing in with a ‘three by three’ development), there are some restrictions you need to consider.
What’s the problem?
Land covenants are rules or restrictions on what you can and can’t do with the land you purchase. Want to put a big bright pink house on your new section? A land covenant in your ownership agreement will likely say a big fat ‘no’ to that. And rightly so, we’re unsure as to why anyone would want to do that (unless your name is Barbie).
Covenants are especially common in subdivisions and are there to ‘preserve the amenity of the neighbourhood’. Covenant restrictions range from prohibitions on pets, long grass, rubbish, and caravans, but importantly they often contain rules on the design of housing and restrictions on further subdivision.
How does this affect the changes to the RMA?
To put it simply, these private agreements are a pain in the a** of the Government’s proposed changes. Although you may be able to put three storeys of three houses on your property without consent, as granted by the amended RMA bill, your land covenants might get in the way of following through with this. It’s also difficult to know how much of the residential land in the country is subject to covenants, however, the potential is there to take the wind out of the changes’ sails.
What are the Government doing about it? Can I avoid this being an issue?
The Government are completing a regulatory impact assessment to see just how bad this problem is. Commenters have noted that implications could amount to a complete nullification of covenants through legislation, this would be at the extreme though.
It’s also interesting to note that the Property Law Act 2007 (Section 277A) already contains mechanisms that nullify and remove covenants, and section 317(e) of the Act gives the Court the ability to modify or extinguish easements or covenants that are contrary to public policy or law. These scenarios only come into play when you’ve got a good case for each covenant.
This issue is a tricky one. With housing stocks consistently dropping around the country, it’s clear that housing is desperately needed. Access to adequate housing has recently been declared a human right by the UN, so extreme measures need to be taken to help with this. But these extreme measures could also unnecessarily interfere with freedom of contract and erosion of property rights.
If you’re wanting to build on your land or purchase land in a subdivision with a few covenants, get in touch with us today. Our superstar conveyancing team will take a look at what you’re planning to do and can help identify any sticky spots that you might encounter. And in the meantime, look out for those pesky covenants.
Photo Credit: Etienne Beauregard-Riverin