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Introduction to subdivision

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Abstract

This document provides introductory guidance on the subdivision provisions of the Resource Management Act 1991 (the RMA), and provides background reading to the guidance notes on formulating subdivision policy and structure planning.

We are currently developing guidance on more specific issues relating to subdivision, such as financial contributions and esplanade provisions.

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What is subdivision?

Subdivision is essentially a process of dividing a parcel of land or a building into one or more further parcels, or changing an existing boundary location. Although subdivision does not itself alter the way land is used, those who subdivide land will almost inevitably be doing so to alter the land use. Subdivision is a very convenient time to address environmental impacts of intensification and change in land use, as it can be inefficient to impose controls through separate consents at a later stage.

Land subdivision creates separate and saleable certificates of title, which can define an existing interest in land (including buildings) and impose limitations on landowners or occupiers for how the land can be used or developed, through conditions and consent notices imposed under sections 108 and 220 of the Resource Management Act 1991. Subdivision also provides the opportunity for a council to require land to be vested and reserve and other financial contributions to be taken to provide necessary infrastructure.

Land is usually subdivided for one of the following purposes:

Land in New Zealand is owned in two different ways:

These are two varieties of land tenure, and they affect the way land is subdivided.

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Subdivision under the RMA

Land subdivision under the RMA includes:

Under the RMA (section 11), no person may subdivide land (as defined by section 218 of the RMA) unless the subdivision is expressly allowed by a rule in a plan or a resource consent, and a survey plan has been processed under Part 10 of the Act.

The critical definitions that relate to this provision are:

However, there are a number of exemptions from these provisions, which means that not all subdivisions are subject to the RMA.

RMA subdivision provisions generally do not apply to the subdivision of Māori land unless land is proposed for sale outside of the hapu. See Subdivision and Māori Land later in this document for more information.

The other exemptions are outlined in sections 11(1)(b) - (d), and include subdivisions:

There are also exemptions from subdivision in a number of other acts, including the Housing Restructuring Act 1992, the New Zealand Railways Corporation Restructuring Amendment Act 1993, and the Airport Authorities Amendment Act 1993.

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The effects of subdivision

Subdivision by itself is not a use of land, and so does not in itself alter the way land is used. It is essentially a process of dividing a parcel of land or a building into one or more further parcels, or changing an existing boundary location.

Many of the effects associated with subdivision arise from the land uses that occur as part of the land conversion process, or those that arise from the use or development of the new allotments. The subdivision stage is a good time to plan for future environmental impacts, and to provide the necessary infrastructure to support future land uses. The functions of territorial authorities, contained in section 31 of the RMA, were specifically amended in 2003 to reflect this relationship between the effects of land use and subdivision.

There are two aspects of the effects of subdivision that need to be considered:

Subdivision will generally enable some activity to take place that otherwise may not have been allowed, or may not have been viable, on the parent lot. Multiple dwellings in a rural area are a good example of this, as most district plans will allow only one dwelling per lot regardless of its site size. These types of applications would generally be carefully assessed to determine the probable effects of the land uses that would be likely to follow as-of-right.

Subdivision of land into new parcels gives rise to a certain expectation of how that land will be used and developed in the future. In this way, subdivision can have an indirect or catalytic effect by precipitating change. These changes can result in effects on the environment, both positive and adverse.

Subdivision is usually either preceded or accompanied by the removal of vegetation, the disturbance of land, and other changes to the natural and physical environment as building sites and access roads are formed and services installed. These works can alter drainage patterns, increase the concentration time for stormwater run-off, and generally alter the landscape. Such land-use activities can not be separated from - and are in fact integral to - the subdivision process, and are therefore legitimate effects to be considered for any subdivision application.

Common effects of subdivision on the associated physical development can include:

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The subdivision process

The process of subdivision involves several stages as indicated in following Figure 1. The first four stages are primarily under the jurisdiction of the RMA. The process of gaining a subdivision consent under the first stage is no different to obtaining a land-use consent, requiring both an assessment of the application, determination on notification, and a final decision. The Figure is followed by further explanation of what happens at key stages in the process.

Figure 1: Process of subdivision

This process is described below.

Gaining a subdivision resource consent

Very few district plans provide for subdivision as a permitted activity, and even then section 223(1)(b) (Approval of survey plan by territorial authority) of the Act requires that a certificate of compliance first be obtained under section 139 of the Act. An application for a subdivision consent needs to be accompanied by a subdivision (also called "scheme") plan, together with an explanatory report, which will include any information required by the district plan. As with any resource consent application, an assessment of effects on the environment (section 88 of the RMA) is also required.

The subdivision application will be assessed by the territorial authority in accordance with the relevant provisions of the district plan and the RMA. Subdivisions that involve significant earthworks, discharges and/or diversions of watercourses may require consents from the regional council. It is common in these cases for councils to work together with the applicant, either informally or formally, in the processing of the subdivision consent. In some situations, either the notification or consideration of an application may be deferred under section 91 until an application for the regional consents is made. A joint hearing may be considered necessary (section 102 of the RMA).

Conditions of subdivision consent may be imposed under sections 108 (Conditions of resource consents) and 220 (Conditions of subdivision consents) of the RMA. For most subdivisions, these will be based on matters outlined in the district plan. For more information on conditions of consent, refer to the Quality Planning guidance note Conditions of Consent.

Works carried out / conditions of approval met

The second stage of subdivision involves the consent holder complying with the conditions of subdivision consent. This typically includes the payment of any financial or development contributions, design and approval of the engineering details by the territorial authority 's infrastructure and asset managers, and completing the physical works such as the provision of roading, water supply, earthworks and drainage.

During this period a licensed cadastral surveyor will define the allotments and prepare the title plan for eventual submission to the council and lodgement with Land Information New Zealand.

Approval of the survey plan (including any endorsements) by the territorial authority

This stage involves approval of the survey plan by the territorial authority prior to approval and deposit by Land Information New Zealand.

The plan is submitted to the authority under section 223 for checking that it conforms with the subdivision consent already issued. The authority has 10 days to either approve or decline the plan under section 223(1A). It must ensure that the subdivision layout and provisions are correct and that all conditions of the consent have been (or will be) satisfied. Conditions may include matters such as required construction activities, vesting of lands for roads and reserves, payment of financial or development contributions, amalgamation of allotments, protection of land against erosion, granting or reserving of easements, and registration of bonds or consent notices for securing conditions of a continuing nature.

At this stage, the authority may approve the plan under section 223 notwithstanding that some or all conditions of subdivision consent have not yet been satisfied. The authority 's certificate may be endorsed on either the plan or a copy, or on an accompanying document appropriately linked to the plan. The certificate must be signed by the chief executive of an authorised officer of the authority.

The territorial authority is further required under section 224(c) to provide a certificate (on the plan or a document signed similarly as for the section 223 certificate) stating that all or any of the conditions of the subdivision consent have been complied with to the satisfaction of the authority and that in respect of such conditions that have not been complied with, any necessary completion certificate (section 222) or consent notice (section 221) has been issued by the authority, or any bond (section 108(2)(b)) has been entered into by the subdividing owner in compliance with the relevant condition. The two certificates may also be combined into one statement and duly signed.

The plan and appropriate documentation are then ready for lodgement with Land Information New Zealand for approval, deposit, registration and issue of new titles.

Approval and Deposit by Land Information New Zealand

The final stage of subdivision involves survey plan approval and deposit by Land Information New Zealand and cannot be fully executed unless the plan is accompanied by the required sections 223 and 224(c) certificates and all necessary documents for registration as required by section 224.

The plan may be lodged as either a traditional hard copy or as electronic data. It is processed to check the definition of land boundaries and validate that it correctly fits into the national cadastral database (called Landonline). Once it has been assessed correct the plan is Approved as to Survey under the Cadastral Survey Act 2002.

It then remains in Landonline while it is examined for title purposes as to all documentation having been lodged (including an application for new titles) and in correct format for registration. Once all matters are in order the plan is Deposited by Land Information New Zealand and fully merged into Landonline to become part of the updated cadastre. New titles are finally issued under the Land Transfer Act 1952 (or the Unit Titles Act 1972).

If any of the above matters cannot be properly dealt with the plan cannot deposit. In that case there is a maximum period of three years from the date of the section 223 approval for issues to be resolved and the plan to subsequently be deposited (s224(h)).

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Differences between subdivision and land use

The fundamental difference is that subdivision can not be carried out unless it is "expressly allowed by a rule in a plan or a resource consent" (section 11 of the RMA), whereas land-use activities are permitted unless otherwise provided for in plans (or resource consents) (section 9).

The key differences for councils between administering subdivision and land use include the following.

To find out more about consent notices, covenants, easements and right-of-ways see Reading and Interpreting Certificates of Title.

Good practice tips

A further important difference between subdivision and land uses is that subdivisions will often involve a significant contribution in land and infrastructure that becomes publicly owned after the subdivision has occurred. For more information, refer to the LGNZ Knowhow (note that this guidance is not available free of charge)and the Frequently Asked Questions guidance on the Resource Management Act/Local Government Act interface.

The general costs associated with subdivision are also different to those associated with land-use consents. Carrying out a subdivision has a number of costs that are not always readily apparent. These costs would generally include:

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Subdivision and hazard-prone land

Section 106 of the RMA provides the ability for councils to refuse subdivision applications and the discretion to grant a subdivision consent, subject to conditions, in certain circumstances. These circumstances are where:

This section, and section 107A(2), are the only two sections in the RMA that allows for a controlled activity consent to be refused over and above section 77B (which states that a controlled activity consent must be granted unless it has insufficient information to determine whether the activity is a controlled activity).

This section recognises that not all hazard-prone land can be easily identified at the time of plan preparation. The council may become aware of potential risks only at the time of detailed site analysis for a subdivision application. This provision provides a council with the discretion to be able to allow the subdivision of hazard-prone land if the applicant can demonstrate that they can adequately address any adverse environmental effects.

There are potential legal liability issues for both the council and an applicant or developer surrounding the subdivision of hazard-prone land that should be addressed both at the time of plan preparation and during resource consent assessment.

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Subdivision and esplanade reserves

The RMA contains specific provisions relating to esplanade reserves and esplanade strips. The purpose of esplanade reserves and esplanade strips is to help:

They can also have other purposes, such as ecological protection and natural hazard management (see section 6 of the RMA).

Sections 77, 220, and 230 to 237-237H set up a mandatory prescriptive regime that must be observed in the subdivision process. These require that an esplanade reserve is provided upon subdivision in the defined circumstances, unless there is a rule in a plan or a resource consent that allows otherwise. This contrasts with the situation for land uses, where the presumption is permissive and an esplanade reserve is not required unless there is a rule in the plan to that effect.

Esplanade reserves and strips are the subject of a future Quality Planning guidance note.

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Subdivision and Māori land

Māori land is defined in section 129 (sections 1 and 2) of the Te Ture Whenua Māori Act 1993 (Māori Land Act 1993). This section defines Māori customary land as "land that is held by Māori in accordance with tikanga Māori".

The Te Ture Whenua Māori Act made significant changes to the powers of territorial authorities to require esplanade reserves and reserve contributions on the subdivision of Māori Land. Its primary intention was to:

There are two main differences between normal subdivision and subdivision of Māori land:

Te Ture Whenua Māori Act provides that any applications for subdivision of Māori land that are to remain within the hapu will be dealt with entirely by the Māori Land Court. The Māori Land Court will decide on whether esplanade reserves or reserve contributions will be required. It will also usually impose a restriction that the land may not be alienated other than in accordance with the Te Ture Whenua Māori Act 1993. The council is entitled to make submissions to the Māori Land Court if it feels that reserves should be required and/or a survey plan submitted.

This also means that Māori land subdivision within hapu is not subject to the same assessment as a 'normal ' subdivision being assessed by a council, particularly regarding size, shape, area, access and (most importantly) infrastructure and servicing unless the Māori Land Court chooses to address these issues.

Any applications that would involve the transfer of the land outside the hapu are subject to the normal subdivision provisions of the RMA.

Good practice tip

There are three options for taking esplanade reserves or land as part of the subdivision of Māori land:

Most records of Māori land are held at the Māori Land Court, although Land Information New Zealand also holds some land records. For information about Māori freehold land, see the Māori Land Information Base. The database contains Māori Land Court information about Māori freehold land and can be used to locate individual Māori land blocks on a computer-generated map.

An excellent newzealand.govt.nzportal for information on aspects of Māori land can be found on the Government Portal.

Acknowledgements

The material in this guidance document was prepared by Gina Sweetman from the Ministry for the Environment, with assistance from Stuart Kinnear of Stuart Kinnear Consultancy, building on initial material prepared by Peter Reaburn of Cato Bolam Consultants. It was peer-reviewed by Ross Miller from Auckland City Council and Mike Gillooly from Christchurch City Council. This guidance document was published in February 2005 and updated in March 2006.

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Appendix

Land tenure in New Zealand, or the means by which land is held, is derived from English law, and is limited to freehold and leasehold. Under the English feudal system all land was owned by the Crown and the Crown granted land to its tenants for feudal services. In New Zealand, the Crown has an underlying ownership of all land, which legally enables it to restrict uses of private land, or to redefine the rights granted to private owners, through legislation (such as the Resource Management Act 1991).

Along with tenure is the concept of estates in land. This was developed to deal with the fact that because land was owned by the Crown, the tenant 's rights to that land need to be defined. The most common forms of estate are fee simple and leasehold. Fee-simple estates last until the owner of the estate dies intestate without successors, at which time the land ownership would rest fully with the Crown. A leasehold estate is less than a fee-simple one, and is the estate for a fixed term of years (quite often 999 years). The modern concept of land ownership is that the interest in the land is "a bundle of rights" which may be exercised in respect of a particular piece of land.

An allotment is defined in section 218 of the Act as meaning:

a) Any parcel of land under the Land Transfer Act 1952 that is a continuous area and whose boundaries are shown separately on a survey plan, whether or not -

i) The subdivision shown on the survey plan has been allowed, or subdivision approval has been granted, under another Act; or

ii) A subdivision consent for the subdivision shown on the survey plan has been granted under this Act; or

b) Any parcel of land or building or part of a building that is shown or identified separately -

i) On a survey plan; or

ii) On a licence within the meaning of [Part 7A of the Land Transfer Act 1952]; or

c) Any unit on a unit plan; or

d) Any parcel of land not subject to the Land Transfer Act 1952.

Freehold subdivisions occur where new allotments (usually referred to as lots) are created under the Land Transfer Act and ownership is held in an estate in fee simple. Fee simple means that the ownership of the land and the buildings on it is held solely by those persons listed on the certificate of title. Freehold is the most common form of subdivision. The boundaries are pegged by registered surveyors and a 'guaranteed ' title is issued (see Reading and Interpreting Certificates of Title for situations when titles are not guaranteed).

Leasehold subdivisions: land or buildings or both that are leased for a period exceeding 35 years is defined in the RMA as a subdivision. A leasehold estate is most commonly defined as an estate or interest in land held for a fixed term of years. Ownership is through a lease from the owner of the freehold title. Leaseholds usually operate under continually renewable terms, with a 'ground rent ' payable to the freehold title owner. The leaseholder effectively buys the right to own the dwelling or building and lease the land for a certain time. The leaseholder can sell the lease, but there are often restrictions on the use of the property.

Unit title subdivisions (or strata titles) generally occur where more than one dwelling or building is built on a single title and separate ownership is required. This includes multi-storey developments and the unit title allows for ownership to be defined in three dimensions. A unit title provides single ownership of a 'principal unit ' (the dwelling) and one or more 'accessory units ' (eg, garages or outdoor spaces). Each principal and each accessory unit will usually be defined spatially, so that the dwelling and any other buildings or outdoor spaces are contained in compartments of space, which are owned rather than leased. There are usually common areas that provide access for all unit title owners (eg, driveways, lifts and stairwells).

A unit title is made up of two components:

In the event that a unit title is cancelled, each owner will be provided with an undivided share in the ownership of the units.

The Unit Titles Act 1972 controls such developments, and a body corporate administers the day-to-day running of the complex. Unit titles involve owners in financial and administrative activity, such as attendance at yearly body corporate meetings, decision-making with regard to changes to units, paying body corporate administration fees, and maintenance of common areas. Voting rights for a body corporate are usually equal to 1/10 of the value of the unit. The Unit Titles Act is currently being reviewed.

Company lease or company titles occur where the owners of the units are shareholders in a private company with occupation rights only to an individual unit. This form of lease is now rarely used. The main disadvantage of the system is the difficulty shareholders face in raising a mortgage, because there is no satisfactory security. A company lease is more restrictive than a unit title because approval of the majority of shareholders is necessary for either leasing or selling a company lease property. 'Company lease ' is defined in section 2 of the RMA.

Cross-lease subdivisions (occasionally called composite leasehold and share titles) occur where buildings or dwellings are leased. The cross-lease plan shows the dwellings as 'flats ' and is often called a 'flats-plan '. A cross-lease title is a legal device for registering an interest in land. It emerged about 25 to 30 years ago as a means of obtaining mortgage security for the purchase of ownership flats. The term 'cross-lease ' is used to describe the method whereby the purchaser of a dwelling / flat obtains a lease of that dwelling, generally for a term of 999 years, together with an undivided share in the underlying fee-simple estate. Although cross-leases originally involved two titles, the method has now evolved to a single-title system. This 'composite ' title is a single title document recording the proprietor 's proportional undivided share in the fee-simple title and an estate in leasehold of the particular flat.

Cross-lease titles usually involve common-use areas (eg, shared driveways) and exclusive or restrictive covenant areas (eg, backyards). The owners agree to use certain areas for their own use without infringing on the areas of the other owners. Because the owners are tenants in common of all the land, they do not trespass if they encroach on or use another person 's exclusive area. They are, however, in breach of their lease, and the offended party could seek a civil remedy. It is important to note that it is the building that is being leased, not the entire land.

Any changes to be made to a cross-lease site or building require the consent of all other cross-leasing owners (eg, to erect a garage or add a new room).

The subdivision of land (where land is defined as including the airspace above land) is defined in section 218 as being:

a) The division of an allotment -

I. By an application to a District Land Registrar for the issue of a separate certificate of title for any part of the allotment; or

II. By the disposition by way of sale or offer for sale of the fee simple to part of the allotment; or

III. By a lease of part of the allotment which, including renewals, is or could be for a term of more than 35 years; or

IV. By the grant of a company lease or cross lease in respect of any part of the allotment; or

V. By the deposit of a unit plan, or an application to a District Land Registrar for the issue of a separate certificate of title for any part of a unit on a unit plan; or

b) An application to a District Land Registrar for the issue of a separate certificate of title in circumstances where the issue of that certificate of title is prohibited by section 226.

A survey plan is defined in section 2 of the Act as meaning:

A plan of subdivision of land, or a building or part of a building, prepared in a form suitable for deposit under the Land Transfer Act 1952 or with the Registrar of Deeds; and any Crown plan prepared for a similar purpose as the case requires, and includes -

a) A unit plan; and

b) A plan to give effect to the grant of a cross lease or company lease.

Exemptions under the Public Works Act : the Public Works Act 1981 provides the Crown and local government with the power to acquire land, either by agreement or by compulsory acquisition. Where land has been taken, transferred or acquired, the Crown or local authority can direct the District Land Registrar to issue a certificate of title (for the estate on the land or part of the land) without requiring any subdivision consent under the RMA. A similar provision applies when land is being disposed of.

Exemptions for reserves under Te Ture Whenua Māori Act 1993: this exemption applies when either Māori freehold land or any general land is set apart as a Māori reservation for specifically defined purposes. The only requirement is that the Chief Executive (of Te Puni Kokiri) declare the land to be included in Māori reservation by notice in the Gazette, after which time the land legally forms part of that reservation.

Exemptions under the State Owned Enterprises Act: these exemptions address situations where:

Exemptions for orders under the Property Law Act 1952: this section of the Property Law Act 1952 allows the owner of a piece of land-locked land to apply to the Court for an order to have reasonable access to the land, granted by vesting any other piece of land, or creating an easement over any other piece of land, or both (in both cases whether or not that piece of land adjoins the landlocked land). Where such an order is granted, section 129B(15) specifically states that:

… nothing in Part 10 (Subdivision) of the Resource Management Act 1991 shall apply to any transfer, exchange or other disposition of any land made in pursuance of an order of the Court made under this section.

Māori freehold land came into being in two ways. Firstly, the Crown set aside land for Māori from the Māori customary land that it purchased for the settlement of New Zealand. Specific Māori individuals were granted Crown grants for joint ownership of such land. Secondly, the Māori Land Court researched ownership of Māori customary land that had not been alienated, and appointed (up to) 10 Māori individuals into joint ownership. Ownership of the land was confirmed by the Māori Land Court and title granted by the Crown.

The purpose of the Te Ture Whenua Maori Act is to facilitate and promote "the retention, use, development and control of Maori land as taonga tuku iho by Maori owners, their whanau, their hapu and their descendants".

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