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Home / Property

Tread carefully buying land

Diana Clement
By Diana Clement
Your Money and careers writer for the NZ Herald·NZ Herald·
18 Apr, 2017 03:03 AM5 mins to read

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Make sure you read the local district plan to ensure that there have been no major changes of zoning in the neighbourhood. Photo / Getty Images

Make sure you read the local district plan to ensure that there have been no major changes of zoning in the neighbourhood. Photo / Getty Images

Buying bare land can be a complex process and buyers need to look beyond the superlatives of the sales pitch.

Making the right choice starts with the basics: how close the section is to the amenities such as shops, schools, public transport, libraries or whatever is important to you.

If you're aging, for example, medical facilities can be important.

The next question to ask yourself is if the aspect of the section will make it a nice place to live. Is it in a wind tunnel or on the south facing side of a hill?

Will it have views? Could it be overlooked? What's more, if it's in a steep or awkward location it might cost more to build on.

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It's a good idea to visit at different times of the day and week. If you will be driving to work, check out the route at rush-hour in both directions. Is there a 15-minute wait to get onto the motorway?

There are a number of legal questions to pose as well, says property lawyer Tony Steindle, of Steindle Williams Legal. It's essential to check any "restrictive covenants" on the title, which prescribe what you can build on the section, Steindle says.

"They are intended to make sure that all houses are of a high standard for the area," says Steindle.

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"They will often provide that the house needs to be of a minimum size, specify what building materials are used in construction, and a range of other restrictions."

Whatever you intend to build needs to comply with these covenants and any council requirements.

"Planning rules will restrict how close you can build to a boundary, and the height of a building adjacent to the boundary to ensure that your neighbours are not living in a shadow," he says.

As well as whether the site is sunny or windy, check out the local council's geotechnical report, which would have been required at the time of the subdivision.

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"The condition of the land could escalate building costs," says Steindle.

"For example, foundation costs may be much higher if the soil contains peat, or there is volcanic rock under the soil."

Make sure you read the local district plan to ensure that there have been no major changes of zoning in the neighbourhood.

It could be that the houses beside your section have been rezoned for multi-level medium density housing and your light or view or both will be blocked out as a result.

Beware potential natural hazards such as flooding, erosion, and subsidence.

Thanks to the Building Act 2004 councils should refuse building consent if building on the property will exacerbate natural hazards.

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Look out, however, for a section 72 notice (or section 36 under the 1991 Building Act) on the title, which is in effect an alert that there could be hazards.

These notices mean that the council has considered the natural hazards, but decided that they won't make the problem worse.

With natural hazards, however, it's sometimes impossible to be 100 per cent sure that they don't pose a risk to housing.

Just ask all the Christchurch homeowners whose homes were red-zoned following the 2010 and 2011 earthquakes.

If you do choose to go ahead and buy, be aware that you might pay more on insurance for a property subject to a section 36 or 72 notice.

As with apartments, many sections are purchased "off the plans", which means the seller needs to get title to the land before settlement can occur.

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In these situations the developer will need some flexibility in terms of the title that will issue, says Steindle.

"A buyer should be clear as to the scope of that flexibility. For example, the purchase price should decrease if less land is available than was anticipated."

With off plan purchases make sure there is a "sunset date" in the agreement.

That is the date by which the buyer can cancel the agreement if no progress has been made in getting title, says Steindle.

If you're buying a section in an existing neighbourhood, then you need to know about the neighbours.

Often new sections in existing suburbs are cross-leased, which brings with it an extra set of issues.

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Find out more about that here

It's a good idea to door-knock in the neighbourhood. Also consider sitting outside in your car at different times of the day to get a feel for the area.

Neighbours can move on, but the culture of the street can be important.

Finally, whether it's a new section or one in an older neighbourhood, it's essential to find out what services are connected to the site.

That includes water, sewage, power, phone and gas. Will you be able to get high speed fibre internet access?

If you work from home you might even want to find out how good the mobile phone reception is at the property.

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