Profit from Subdivision Rights
Published January 2012
Transferable Subdivision or Development Rights allow landowners to take advantage of their subdivision rights without actually losing the land! The purchaser of these rights can gain the ability to subdivide a property that otherwise doesn't qualify for subdivision and these transfers are becoming more popular.
Generally these transfers can only be made within a particular local authority and not from one district to another, although with the split of the old Franklin District between Auckland, Waikato and Hauraki it can actually happen now. Perhaps in the future transfers will be allowed on a regional basis.
I believe that we will see much more subdivision happening through this method in the future as rural District Councils continue changing their rules to stop further lifestyle and small rural blocks being created. Those who have already gained approval for rural lots will be able to choose between developing them on site and losing the land or selling these 'titles' to others for good money. For the receiving person this may be the only way left to subdivide.
These Subdivision Rights are purchased through Real Estate agents or privately from the vendor and the price generally relates to the value of the new title being produced. Most Councils specify either which locality the additional titles can be brought into or which areas they can't.
In general the rights are transferred into less sensitive areas from the more sensitive areas. Factors such as ecology, effects of intensive farming practices, noise, productivity of land and traffic effects are all taken into account. Some Councils have actual zones mapped out to receive these additional titles.
These transferrable rights can be created through protecting ecological, cultural or landscape features of value to the community on your land. Otherwise you might have more than one existing title, approval for more or the right to subdivide (for the time being) - these can all sometimes be transferred for a good profit.
These subdivisions are a little more complex than normal; however there are opportunities for those prepared to pursue them. Each particular property has individual property rights according to the local District Plan so specific analysis is required on a case by case basis.
We are involved with subdivisions across the wider Bay of Plenty, Waikato and Coromandel areas and see the straight forward opportunities for rural subdivision disappearing fast, so if you are interested to find out how the changes or transferable subdivision rights may affect you, please feel free to give me a call.
By Brent Trail – Managing Director
Brent Trail, Managing Director of Surveying Services, specialises in resource consent applications for subdivisions across the Waikato, Coromandel and Bay of Plenty.
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