WHAT CAN I DO ON MY LAND?
When you are planning any activity on your land you need to consider whether the activity is allowed in the planning rules contained in the local Council's District Plan. In most instances the activity will be allowed as of right. If so it is called a permitted activity. In the Auckland City plan as it relates to the old Rodney District area these will include obvious activities such as building a house in a residential zone or grazing livestock in a general rural zone. However even with such obvious examples of everyday use there may be restrictions and so it is essential to obtain advice as to even what appear to be the most clearcut examples of permitted activities. For instance there are always height to boundary, height, yard areas (front, side and rear), and other rules in each zone where you are permitted as of right to build a house.
There are other classes of activities dealt with in all District Plans. For each zone there are set out in the District Plan lists of activities and what category those activities fall into. The types of activities that are listed that are not specified as permitted activities are either controlled activities, restricted discretionary activities, discretionary activities or prohibited activities. If the activity is not listed as one of these or it is specifically labelled as such then it is a non complying activity. In all cases except for prohibited activities which cannot be carried out at all the activity can only be carried out on the land if you have a resource consent to do so. I shall deal with each one following.
A controlled activity is an activity for which Council will grant a resource consent but that consent will be subject to conditions that are set out in the District Plan. The rationale for that being that Council is happy to see the land used in that fashion but wants to control some aspect/s of that use to mitigate adverse effects on the environment. An example of a controlled activity in the Rodney area is construction or relocation of accessory buildings in a Landscape Protection Residential zone where the matters to be taken into account by Council in determining the application for a resource consent are issues pertaining to external appearance of the building and any landscape modification.
A discretionary activity is an activity for which Council may in its discretion grant a resource consent. The exercise of its discretion is generally guided by policies and rules set out in the District Plan for such zones and it may or may not exercise its discretion favourably to grant the consent. A restricted discretionary activity is an activity for which Council's discretion must be exercised in dealing with an application for a resource consent but in exercising its discretion Council must only consider the criteria that are specifically listed in the District Plan and if in considering those criteria it is able to exercise its discretion either way then it must do so. In that case Council cannot rely on any other criteria in coming to its decision as to whether to grant the resource consent or not to do so. Examples of these are what were quite contentious in formulating and publicly notifying the rules on Minor Household Units in Rural zones. If the Minor Household Unit complies with the building development rules (ie height to boundary, yard requirements, height restrictions, etc) then the activity is Restricted Discretionary (and Council will allow it subject to conditions) but if the activity does not comply with those rules then the activity is Discretionary.
A non complying activity really defies the rules. It is either specifically labelled a non complying activity in the District Plan or else it is an activity that is not mentioned at all in the District Plan as it has not been considered. Council may only grant a resource consent for a non complying activity if adverse effects of the activity on the environment will be minor and the activity would not be contrary to the objectives and policies of the District Plan (operative and/or proposed). In other words Council has wide discretion in its handling of the application.
Any activity labelled as a prohibited activity within a specific zone in the District Plan cannot be carried on at all within that zone and Council is unable to consider an application for such an activity in that zone.
I will touch briefly on existing use rights which are rights acquired over a period of time which operate as exceptions to the normal rules that require resource consents for activities that do not conform with the rules in a District Plan. If a building on a property has been used say for professional offices for a long period of time and then (after the rules have been changed to exclude that activity as a permitted activity) it is left unoccupied for a period of 12 months or more it is critical when commencing a similar business in the premises to ensure that existing use rights have not been lost. As that is a very complicated situation which requires due care legal advice is required before contemplating such a move. Reason for that is that when existing use rights are lost you will be required to obtain a resource consent for your proposed activity if it is no longer a permitted activity. Another factor to be mindful of is that even if the activity is still permitted (either by the rules or as an existing use) and the proposed activity is slightly different to that carried on previously Council may have rules for provision of parking or money in lieu on commencement of business which can apply. I have heard of sums in excess of $100,000.00 being paid to Council in lieu of parking for what are quite small retail businesses. All leases provide that the tenant should beware and ensure that they are able to use the premises as they propose and there are no hidden costs for the slightly different activity before entering into a lease. It is not the landlord's problem as it concerns activities on the land.
Subdivisions are a separate issue. You cannot subdivide your land unless Council has issued a resource (also called a subdivision) consent for it. There are rules in every District Plan setting out all criteria for subdivisions in certain zones. Subdivision processes and subdivision consents are worthy of another specific article setting out all procedures from start to finish so watch this space.
I have only covered the very basic points for land use consents above. There are many other legal issues especially pertaining to public notification of applications for land use resource consents that need to be considered as well and advice obtained at an early stage is often crucial. If you proceed without a resource consent when one is required then you risk significant penalties.
Land sales and purchase – New GST rules
From 1 April 2011, the rules relating to the GST treatment of sales of land, or sales where land forms part of the transaction, is changing when both parties are registered for GST. For many transactions, this will have positive effects on a purchaser's cash flow.
In short, if the land being bought and sold is to be used by the purchaser for the purpose of making taxable supplies, and is not intended to be used as the purchaser's principal place of residence then the transaction will be subject to compulsory zero-rating. Where a dwelling that is intended to be the purchaser's principal place of residence is included in the sale, that dwelling is deemed to be a separate supply of goods from the rest of the transaction. Additionally, where the land forms part of a larger transaction, then the whole transaction will be zero rated.
It will be necessary for the purchaser to make a statement in writing at or before settlement to the effect that:
• the purchaser is, or expects to be, a registered person (by settlement); and
• the purchaser is acquiring the land with the intention of using it for the purpose of making a taxable supply; and
• The purchaser does not intend to use the land as a principal place of residence for the purchaser or a person associated (relative).
If the purchaser nominates somebody else to complete the purchase, it is the intention and status of the nominee that is relevant, not that of the original purchaser. The nominee should make the statement.
For binding agreements entered into prior to 1 April 2011, but with settlement after that date, the vendor has the choice of which treatment to adopt (i.e. the current treatment or the new treatment).
If the transaction proceeds as zero-rated under the new provisions, the vendor is obliged to maintain sufficient records to enable the following matters to be ascertained:
o the name and address of the purchaser; and
o the GST registration number of the purchaser; and
o the description of the land; and
o the consideration.
Rules are in place to deal with the incorrect GST treatment. Possible situations are:
GST position changing after agreement signed, but before settlement - the date of settlement is relevant for deciding what GST is payable.
Transaction wrongly zero - rated and this is discovered after settlement -
If one of the parties is not GST registered, then existing GST rules apply.
As usual, it is important for parties to consult with their lawyer and accountants prior to entry into an agreement.
Neighbours – A fertile source of dispute
It has been said, "a dispute between neighbours is a [law] practitioner's nightmare. Boundaries, fences, rights of way and so on, are a fertile source of acrimonious litigation into which, strive as he might, the practitioner finds it well nigh impossible to inject a modicum of common sense and rationality. Costs escalate out of all proportion to the nature and significance of the dispute". For confirmation one need only watch a certain breed of reality television show.
There are a number of areas where disputes can arise. The most common are probably boundaries and fences, animals and noise and finally trees.
Boundaries are surveyed and cannot be altered without consent of all affected. In the case of a dispute as to the whereabouts of the boundary, a surveyor can establish this. Fences must in the absence of agreement be on the boundary. The cost of building and repair is shared provided the procedures set out in the Fencing Act 1978 are followed. It is important to comply with those procedures to ensure your neighbour can be held liable. Buildings or fences that are over the boundary are technically a trespass. The Court has power to deal with this situation.
Domestic animals have long created tensions between neighbours. Most councils have by-laws regulating domestic animals and the number that can be kept. In simple terms, if a domestic animal strays onto your land and causes damage the owner is liable. There are some special provisions. Cats can trespass without owner liability for damage unless they have a "mischievous propensity". Dogs, however, are closely controlled and in most areas are not allowed to roam. Dogs that attack people or stock can be subject to seizure. A dog control officer can also require an owner to deal with a dog that barks excessively.
Owners of stock may be liable for wandering stock that comes on to another property and causes damage. The owner of the property cannot recover damages if the property is inadequately fenced.
Excessive noise is a fertile area of complaint, especially if you do not share your neighbour's taste in music at two in the morning. Council officers have powers to deal with excessive noise and can sometimes be persuaded to do so.
A court can require removal or trimming of a tree in cases of danger, undue obstruction of views or undue interference with the enjoyment of your land. The Court must balance the competing rights of the two property owners. If branches or roots cross your boundary you are entitled to cut them back to the boundary (unless the tree is protected). The portions trimmed (including fruit) remain the property of the tree owner.