In my career as a lawyer, I have encountered numerous subdivision projects with significant issues. These legal challenges often come to my attention towards the project's conclusion, and it's frustrating to think that earlier consultation could have greatly reduced stress, complexity, and costs for all parties involved. This phenomenon is not limited to smaller subdivision projects either. Even in large-scale subdivisions where a professional company has been engaged to manage the project, avoidable issues still arise.
So, why does this happen so frequently?
Recently, I conducted some modern-day market research (courtesy of Google;-) on companies specialising in subdivision services. The top 10 companies in my search were primarily large, well-known brands, advertising their capacity to oversee and coordinate all essential steps for your subdivision or development. Notably absent was the mention of lawyers. Most understand that lawyers are involved in the 'facilitating consent' stage towards the end of a subdivision project, but what about the crucial 'Development Feasibility' stage?
Perhaps these subdivision experts do involve lawyers early in the process, or at the very least, recommend that clients consult one. However, from my experience, this pivotal step, which could have averted a host of difficulties, has quite often either been overlooked or not given the weight it deserves.
It's important to assemble a team of professionals to ensure your subdivision project is a success. Well duh, of course it is! But in this article, I aim to highlight the steps, essential professionals, but also the ideal timing for engaging each of these key experts.
Engage a planner/surveyor to assess your site and ascertain the Council regulations you must adhere to for subdivision. Depending on your site's specifics, additional experts may be required.
Collaborate with a lawyer specialising in subdivision work. Your lawyer should work closely with you and your surveyor from the outset to identify and resolve potential issues related to subdividing. This includes addressing existing interests on your title that may no longer be necessary or could pose problems. Additionally, your lawyer will guide you on any agreements required with neighboring land and off-plan sale and purchase agreements.
Seek accounting advice to evaluate any potential income tax liabilities that may arise from subdividing the land.
Develop a comprehensive project budget and finalise financial arrangements, ensuring you account for contingencies.
Understand that the process may span several years, contingent on the size and complexity of your subdivision.
Apply for resource consent. Your planner/surveyor will compile an application for resource consent, outlining how your subdivision will align with Council rules. This application will also include an initial subdivision plan for submission. Once granted, your resource consent will delineate the conditions to be met for completing your subdivision, as well as the necessary easements to be included on your land transfer plan, along with any ongoing conditions.
Your surveyor will draft a Land Transfer Plan, which is a refined version of the initial plan submitted to the Council. It may encompass additional easements identified as necessary for on-site requirements. The subdivision plan requires approval from both the Council and Land Information New Zealand.
Ensure that any work stipulated by your resource consent is executed on-site and is subsequently approved by the Council.
Your lawyer will scrutinize the resource consent, subdivision plan, and your title. They will advise you on the requisites to finalize the subdivision. This typically involves preparing easement documents to establish rights between lots for access and services, as well as other entitlements for third-party service providers to the land. It may also encompass documents such as covenants to regulate land usage. If you have a mortgage, you'll need consent from your bank and potentially from any other party with a registered interest in your title.
Upon completion of the aforementioned processes, your lawyer will submit the requisite documents to Land Information New Zealand to obtain your new titles.
When it comes to subdividing, it's important to understand that engaging a lawyer early in the process is not just a wise move, but a critical one. I've witnessed firsthand how addressing legal considerations from the outset can significantly mitigate stress, complexity, and costs down the line. By involving a lawyer right from the Development Feasibility stage, you're proactively identifying and resolving potential issues, addressing existing title interests, and ensuring that all necessary agreements are in place.
If you're contemplating a subdivision project or facing legal hurdles in your subdivision journey, I'm here to help. Don't hesitate to reach out. Contact me today, and let's navigate your subdivision journey together.
© McVeagh Fleming 2023
This article is published for general information purposes only. Legal content in this article is necessarily of a general nature and should not be relied upon as legal advice. If you require specific legal advice in respect of any legal issue, you should always engage a lawyer to provide that advice.