Unlocking Land Value: A Practical Guide to the Subdivision Process

Subdivision is the process of dividing a parcel of land or a building into two or more lots, or changing existing boundaries, commonly for the purpose of sale or development.

Common Types of Subdivisions include:

• Fee simple (separate titles)
• Unit title (multi-unit developments)
• Cross-lease
• Boundary adjustments

Each type has different legal and survey requirements and the timeframes are dependent on the complexity and size of the development.

The first step is to engage professionals, such as a surveyor, to manage the process and undertake any relevant investigations with the local Council for your specific property such as Lot size and zoning. It is also prudent to obtain accounting advice before commencing the process.

An Application for a Subdivision Consent needs to be submitted into the local Council (usually by a surveyor) and must include information such as: Survey plan (scheme plan), head title information, assessment of environmental effects and engineering/servicing reports. The Council will assess the Application against the relevant plan and planning rules in relation to matters such as infrastructure, access, drainage and environment.

The subdivision can be non-notified, limited notified (such as neighbours), or publicly notified depending on affected parties and environmental effects.

If consent is granted it is usually valid for a specified timeframe (approx. 5 years), and it will commonly include conditions relating to:

• Engineering works (access, roading, drainage, water supply, wastewater)
• Development/Financial contributions (financial contributions for infrastructure)
• Esplanade reserves/strips where required
• Services (electricity/telecommunications etc)
• Easements (a legal right over a property for the benefit of the other e.g. for services or access crossing boundaries)
• Compliance with survey standards.

After consent is granted:

1. A licensed cadastral surveyor prepares a Land Transfer survey dataset for new records of title;
2. Physical works get underway (arranged through the required Contractors);
3. The legal process begins, which will generally include a review of the head title(s), obtaining any Bank consents and the preparation of documentation for any surrenders of interests, new easements and Land covenants if required.  Covenants are rules that dictate what owners can or cannot do with their land;
4. The Council will provide:
   1. Section 221 Consent Notice if required (ongoing conditions required by Council on new titles)
   2. Section 223 Certificate (survey plan approval);
   3. Section 224(c) Certificate confirming consent conditions are met.
5. Survey and legal documentation are lodged with Land Information New Zealand (LINZ) for the issue of new titles (with registration taking approximate 4-6 weeks to issue titles) and the subdivision is then complete.

For a timely and efficient subdivision process, it is imperative that communication between surveyors/Council/Bank and Lawyers is consistent throughout, and that the parties work together to progress the subdivision from the first step to completion. Compliance with both Council conditions and registration requirements is important and we recommend this is undertaken with the right professional advice. If you would like to discuss the subdivision process, please get in touch with the property team.

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.