Forms of real estate ownership in New Zealand

Forms of real estate ownership

What are the categories of property right that can be acquired? Are there any interests in real estate other than exclusive ownership?

The four most common types of registered land holding are:

Freehold – This gives the owner freehold ownership of the land and (generally) anything built on the land.
Leasehold – This is where the underlying land is owned by another party, and the owner of the leasehold has exclusive rights to possess the land and the building on it for a set period, subject to the payment of rent.
Stratum or Unit Title – This is common for buildings with multiple owners such as apartments. The unit owner owns their apartment/unit and any accessory units (eg car parks or storage units) and an undivided share of the ownership of the common property (eg lifts, gardens, driveways). The unit owner will also be a member of the Body Corporate, which makes decisions about maintenance and management of the building.
Composite or Cross Lease – This is a combination of freehold and leasehold estates in one title. The owner has an undivided share of the underlying freehold title together with a leasehold interest in its own "area" or "flat."

Other types of arrangements for use of land for a limited period include:

Unregistered Lease – This is the most common and entitles a tenant to "exclusive possession" of all or part of the land for a specified period. It creates both an interest in the land and a contract between the parties.
License – This is a contract under which the owner grants the licensee a non-exclusive right to use all or part of a property for a specified period. This is not an "interest" in the land but only a personal right.
Easements, covenants and profits a prendre – These are interests which can be registered or noted on the title for land, and bind current and future owners.
- Easement – This is a right to use another party’s land for a specified purpose. These rights can be granted over the burdened land in favour of benefited land or to a specific party without being for the benefit of other land ("in gross"). Common types include rights of way, rights to convey water, or electricity and communications.
- Covenants – This is a promise by one party to do or not to do something on land (usually noted on the title). As with easements, this can be for the benefit of another property or "in gross."
- Profit a prendre – This gives a third party rights to take items from the land, eg soil, minerals, or natural produce. A common form of profit a prendre is a forestry right, allowing a third party to grow and harvest trees.

Last modified 22 Mar 2024