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Property law – useful terms

This article provides an explanation of some of the commonly used terms in property law.

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A caveat is a document which is lodged against a title and is notice, by an interested party, that no action is to be taken in relation to that title, until that party has been heard.  The most common form of caveat is the caveat against dealings with a particular piece of land. This means that the caveat would need to be removed from the title to the property before the owner of the land could, for example, transfer the land to another person. An example of when a person may wish to lodge a caveat, is when a purchaser enters into an agreement to purchase land from the owner of the land, and settlement is delayed or when a substantial deposit has been paid.

Record of title
Consists of a document stating the type of interest (i.e. fee simple, leasehold, life interest), a description of the piece of land, the name of the owner, and any interests registered on the title, for example, a mortgage. The most common form of title in New Zealand is the ‘fee simple’ title, also known as a freehold title.

Cross-lease title
A cross lease title is where there is more than one dwelling (or building for commercial premises) on one freehold title.  All owners jointly own the freehold title in shares, and then each of the owners grant a lease to individual owners so that each owner has the exclusive right to occupy their own dwelling.  The lease will usually include a right for an owner to have the exclusive use of a specified area around a dwelling.

Restrictive covenant
A restrictive covenant is a promise contained in a deed.  The most common form of covenant found in property law is land covenants. For example, a developer may wish to ensure that the houses built in a development meet a certain standard and type.  The developer will register on the titles in the subdivision a land covenant setting out certain building requirements e.g. the minimum size of a dwelling, the type of cladding to be used.

An easement is a right of an owner of a piece of land or a person or organisation to use land belonging to another person in a specified way.  A common example of an easement is a right of way. The article “Seek legal advice about easements before buying land” by Sandra Braithwaite dated 13.11.13 explains easements in more detail.

An encumbrance is primarily intended to secure an annuity or rent charge. It may be used as an indirect method of making personal covenants where a restrictive covenant is not able for legal reasons to be used. An annuity is a certain sum of money payable yearly. The person in whose favour an encumbrance is given and who has the right to enforce it is known as the “encumbrancee”. The encumbrancee under a registered memorandum of encumbrance has the normal remedies of a mortgagee under a registered mortgage unless the encumbrance specifically excludes any of those remedies.  An example of an encumbrance is where a local authority requires an owner of land to comply with conditions on an ongoing basis in relation to some activity that is proposed on the land.

A mortgage is a charge over property to secure future payment of money.  The person who borrows the money and who gives the mortgage as security for its repayment is called the mortgagor.  The person who lends the money and who takes the mortgage as security is called the mortgagee.

Possession date
The possession date is the date when the purchaser takes physical possession of the property.

Settlement date
The settlement date is the date when the purchase price of the property is paid in full.  This is usually the same date as the possession date.

A vendor is the person who is selling the property and is also the “transferor”.

A purchaser is the person who is purchasing the property and is also the “transferee”.


This article is current as at the date of publication and is only intended to provide general comments about the law. Harkness Henry accepts no responsibility for reliance by any person or organisation on the content of the article. Please contact the author of the article if you require specific advice about how the law applies to you.

For further information

Annette Edwards - Harkness Henry Senior Associate

Annette Edwards

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