Property problems: Drawbacks in tearing up the paper roads

Q. We have a farm in the central North Island which has a paper road shown on the title. The land is not fenced and is very rugged. Can the paper road be used by the public? Can it be removed from the title?

A. The paper road you refer to is probably shown on your title as a surveyed "legal road" which has not been formed and is not maintained by the council.

Sometimes these have arisen where a road was intended to be built in a particular location but this was never carried out, and in other cases the road may have been built, but in a different position to the surveyed "legal" road.

In New Zealand, no distinction is made between formed legal roads and paper roads, in the sense that the land in question is owned by the territorial authority (ie, the district or city council), and members of the public have a common law right of passage along paper roads in the same way as formed roads.

But whether passage by the public is practicable is another question. For example, a four-wheel-drive vehicle could travel along some paper roads, but in other cases it may not be physically possible even for pedestrians to use them.

The only way to "remove" a paper road is for the local authority to formally "stop" the road. This almost invariably requires public notification to allow for objections.

If there are any objections, an Environment Court hearing will be required, so the process can be relatively expensive and time consuming.

You may want to discuss with your local council what plans it has in this regard. If the road is stopped, the land is most commonly offered for sale to the owners of the adjoining properties.

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Q. For the past three years, I have leased premises from which I operate a retail business. My lease provides for a rent review after three years, and the landlord and I have agreed on a new rental. I have a very good relationship with my landlord, yet he insists that I sign a document recording the new rental. Why is this necessary?

A. It is important to remember that, as the lessee of premises, your title is the lease and the value of your business will in large measure depend on the terms of the lease arrangements.

So it is important that current terms of the lease be properly documented from both the landlord's and the tenant's point of view.

By way of example, financiers will require written evidence of the income the landlord receives or in your case the outgoings for which you are liable.

If either of you wish to sell (in the case of the landlord the premises, in your case the business) the same will be required by any prospective purchaser.

It is therefore strongly recommended that you maintain clear written records of dealings with your lease. Even though you have a good relationship with your present landlord you need to guard against that relationship changing.

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Q. Our company owns a carparking building. A valuer recently said that we might be able to sell off the "air rights" to the building for apartment development, as there has been a recent zoning change. Can you explain what this means?

A. What your valuer referred to as the sale of "air rights" will involve the right to build and have a separate title within the airspace above your building.

It is possible to subdivide land vertically to create separate freehold "stratum" titles.

In your case, this might result in two new titles, one containing your existing building, and the other containing the space above that, within which the new building is constructed.

This will need a subdivision consent from the council.

The legal arrangements for this are likely to be relatively complicated because you will need to create rights of support and services for the new building to be constructed above your existing building.

You will also need to consider carefully how you are going to deal with the maintenance of the building as a whole, insurance arrangements, and what happens if the building is damaged or destroyed. No specific legislation covers this.

As well, you will need to ensure that the construction work can be carried out without compromising the use of your existing building.

So even though it may be possible to subdivide your property in this way, there are significant legal, practical and cost issues which need to be addressed before you take any decision to proceed further.

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