Property guidance by Quay Law
Property guidance by Quay Law
Unit title guidance from Quay Law
Ian Mellett, Barrister and Solicitor, Quay Law
Leasehold and unit title describe different things, and a property can be both. A unit title describes how a development is divided. Leasehold describes whether the underlying land is owned or leased. Understanding the distinction is important, particularly in parts of central Auckland where leasehold land is more common.
With leasehold property, the land is owned by a landowner and leased to the property owner for a set term, often with rights of renewal. The property owner owns the buildings or the unit for the duration of the lease and pays ground rent to the landowner.
Ground rent is usually reviewed at intervals set out in the lease. Reviews can lead to significant increases, which affect the cost of ownership and the price a future buyer is willing to pay. The terms of the lease, including the review basis and any renewal rights, are central to the value of a leasehold property.
A unit title can be held in freehold or in leasehold. Where the unit title is leasehold, each owner holds their unit for the term of the lease and pays ground rent, in addition to body corporate levies. The body corporate may also have obligations under the ground lease.
Some lenders apply particular criteria to leasehold property, and the pool of buyers may be smaller. Leasehold units are often priced lower than comparable freehold units for these reasons. A lower price can be attractive, but the full cost of ownership over time should be considered.
A plain comparison of freehold, unit title, cross lease and leasehold property in New Zealand, and why the title type matters before you make an offer.
How lenders approach unit title apartments and townhouses, what can affect lending, and how to protect yourself with the right finance condition.
A plain English guide to unit titles in New Zealand: principal and accessory units, common property, the unit plan and the body corporate.
If you are considering a leasehold apartment or townhouse, we recommend having the lease reviewed before you commit.
If you are buying or selling a unit title property in Auckland, we recommend speaking with us before you sign an agreement. Contact Ian Mellett at Quay Law, Barrister and Solicitor, by completing our enquiry form below, or call us on 09 523 2408.
The information on this page is provided for general information purposes only and is not legal advice. Every transaction is different, and all matters should be discussed with the team at Quay Law.