Building Covenants NZ - Understanding Subdivision Rules
Building covenants are legal conditions attached to section titles that control what you can build and when. Common in New Zealand subdivisions, covenants protect neighbourhood character and property values by ensuring consistent standards. Before purchasing any section, understanding the covenants is essential - they directly impact your building options, costs and timeline.
What Are Building Covenants?
Building covenants (also called restrictive covenants or land covenants) are legally binding conditions registered on a property's title. They're created by developers when subdividing land and "run with the land" - meaning they apply to all future owners, not just the first buyer.
Covenants serve several purposes:
- Maintain consistent streetscape appearance
- Protect property values across the subdivision
- Ensure minimum quality standards
- Prevent undesirable uses (e.g., commercial activities)
- Encourage timely development
Common Covenant Requirements
Minimum Floor Area
Most subdivisions specify minimum house sizes:
- Typical requirement: 150-200m² for main dwelling
- Premium subdivisions: May require 180-250m²
- Minor dwellings: Often allowed but with size limits (60-80m²)
This prevents very small homes that might lower neighbourhood values.
Building Materials
Developers often specify acceptable materials:
- Cladding: Brick, weatherboard, plaster, specific brands
- Roofing: Long-run steel, tiles, sometimes colour restricted
- Fencing: Timber, not colour steel for front fences
External Colours
Many covenants restrict colour palettes:
- Neutral, earthy tones often required
- Bright colours may be prohibited
- Some require pre-approval of colour schemes
Build Timeframe
Most covenants require building to commence within a set period:
- Typical: 2-3 years from settlement
- Some: Require completion within 12-18 months of starting
- Consequences: Fines, forced sale, or other penalties
Fencing Requirements
- Front fencing often restricted in height (1.2m max) or prohibited
- Materials specified (timber paling, not corrugated iron)
- Side and rear fencing may have height minimums
Landscaping
- Front lawn establishment timeframes
- Driveway materials (concrete or asphalt, not gravel)
- Tree planting requirements
Typical Covenant Comparison
| Requirement | Standard Subdivision | Premium Subdivision |
|---|---|---|
| Min Floor Area | 150m² | 200m²+ |
| Build Timeframe | 3 years | 2 years |
| Cladding | Various approved | Brick/stone preferred |
| Colours | Neutral palette | Pre-approval required |
| Design Approval | Sometimes | Usually required |
How to Check Covenants
- Request from agent/developer: Ask for covenant documents before making an offer
- Title search: Your lawyer conducts this during due diligence
- LIM report: May reference registered covenants
- LINZ records: Covenants registered on title are public record
Covenant Enforcement
Covenants can be enforced by:
- Developer: Usually retains enforcement rights for set period
- Body corporate: If established for the subdivision
- Other owners: Neighbours may have enforcement rights
Enforcement may include requiring removal of non-compliant work, financial penalties, or legal action.
Frequently Asked Questions
Can covenants be changed or removed?
Sometimes, but it's difficult. Requires consent from all parties with enforcement rights (often all owners in subdivision) or court order. Covenants may have sunset clauses expiring after 10-25 years. Don't buy assuming you can change covenants.
What happens if I breach a covenant?
The enforcement party (developer, body corporate, or neighbours) can take legal action requiring you to remedy the breach. This might mean demolishing non-compliant work, repainting, or paying fines. Court action is possible but usually a last resort.
Do covenants affect resale value?
Generally positively - covenants maintain neighbourhood standards and prevent undesirable developments nearby. However, very restrictive covenants might limit your buyer pool. Most buyers appreciate knowing their neighbours can't build something unsightly.
Can I build a minor dwelling with covenants?
Many covenants now permit minor/secondary dwellings (granny flats) but with restrictions - typically maximum 60-80m², matching materials and colours, and sometimes requiring the main dwelling be built first. Always check specific covenant wording.
What if I can't build within the timeframe?
Contact the covenant administrator (usually developer) before the deadline to request an extension. Many are flexible if you have genuine reasons. Consequences for missing deadlines vary - some have financial penalties, others may require forced sale. Know the rules before buying.
Do all sections have covenants?
Most new subdivisions have covenants, but not all. Older established areas typically don't. Rural and lifestyle blocks often have fewer or no covenants. If buying covenant-free land, check council district plan rules still apply.
Can covenants prevent me building what I want?
Yes. If your plans don't comply with covenants, you may need to modify them or find a different section. Some buyers specifically seek covenant-free land for design freedom. Balance your design aspirations against covenant restrictions before purchasing.
Are design approval fees common?
Premium subdivisions often require design approval before building, with fees typically $500-$2,000. This ensures your plans comply with covenants and maintain neighbourhood standards. Factor this into your building timeline and budget.