March 2021

Unit titles are becoming more popular and more complex as we see limited greenfield space available for housing, and limited funding for greenfields infrastructure, making infill an easier and more efficient land use option. This article looks at the basics of forming a unit title development from a fee simple section.

Creating a unit title development

There are generally six key roles in a unit title subdivision:

1. Developer
2. Surveyor
3. Planner
4. Lawyer
5. Valuer
6. Body Corporate Manager

The size of the development and its purpose will dictate whether all of these roles are required. We recommend having all required roles engaged at the beginning in order to work together and address any issues earlier on. A collaborative approach is useful for all parties to ensure that the process runs smoothly.

The process

1. The Planner can assist with the subdivision consent application to the local authority. Building consents will also be required. A scheme plan will need to be prepared by the Surveyor who will determine the boundaries. The Surveyor will map out Principal Units, Accessory Units, Common Property, and easement areas.
2. Once subdivision consent has been granted, and the Developer is comfortable with the consent conditions, physical works can start.
3. The Surveyor will then create the survey plan noting the above.
4. The Lawyer will prepare the easement documentation and obtain the consents from any interested parties noted on the title (for example, the consent of any bank holding a mortgage, or any person with a caveat). The Lawyer can also assist and work with the Body Corporate Manager to draft body corporate operational rules. These can be registered at the time the titles are created. Certain documentation (for example, Authority and Instruction forms), including an application to deposit the unit plan, will need to be signed with your Lawyer (Form 1).
5. The Valuer will assess the relative value of the units (usually based on area) and produce a Valuer’s Certificate (Form 5).
6. The Body Corporate Manager can start to put together a budget for the body corporate, note any proposed levies, and arrange bank accounts. Having this information available early can help with any potential sales or ‘off the plans’ purchases that may come from the development.
7. Once the various signoffs from the local authority have been issued (certificates under sections 223, 224(c), and 224(f) of the Resource Management Act 1991, and a certificate under section 32 of the Unit Titles Act 2010), the titles and survey plan will be ready to deposit with Land Information New Zealand.
8. A title will be created for each Principal Unit (note an Accessory Unit cannot have a title on its own) as well as a Supplementary Record Sheet which will note all the Principal Unit titles on it and any easements and operational rules.

As noted above, not all roles will be required in all cases, for example in a small-scale unit title subdivision, a Surveyor may prepare the resource consent application, and there may not be any Body Corporate Manager. However, we recommend planning to have all these roles involved.

Having your lawyer involved early can assist in a smooth and speedy process. Knowledge of the subdivision will also assist with the on-sale process.