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Fee simple (Freehold) Title
The concept of freehold ownership (estate in fee simple) has its origins dating back to feudal times. Fee Simple is considered the highest form of personal ownership of land allowed under the New Zealand legal system. Fee simple ownership represents absolute ownership of real property.
Unit Title
Unit titles were created by the Unit Titles Act 1972 to allow an individual to own a residential dwelling or
commercial/industrial unit within in a larger complex. It also provides a legal mechanism for multiple ownership
of the common spaces and facilities, such as driveways, communal gardens and facilities, air conditioning
systems and lifts.
The Unit Titles Act 1972 provides a stratum estate in fee simple to a defined 'space' bounded by dimensions of
height, length and breadth, being part of the larger title. Unlike Cross Lease ownership it is buildings based
rather than land based. Unit Titles can function in two dimensions, as in a standard development, as well as in
strata or airspace situations where it functions in three dimensions.
A unit title can be bought and sold, leased or mortgaged. It is made up of four components:
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Ownership of the major units. These are called Principal Units (PU) such as the major residence.
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Assessory Units (AU) such as a car park, courtyard or garden. Assessory Units must be associated with a PU and cannot be sold off separately unless to the owner of another PU. For example: say you owned a car park in a building you could sell it to another PU owner within the same building but not to an outsider.
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An undivided share in the ownership of the common property as tenants in common. That is the share of the common areas such as driveway, lifts, communal gardens, etc.
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An undivided share in the ownership of the units if the unit plan is cancelled.
Body Corporate (BC)
This is made up of all of the individual owners within the building or complex. The BC arranges the upkeep, maintenance and insurance for the building structure. It also pays for items such as repairs and maintenance of lifts and mechanical services and payment of electricity for lighting common areas. These expenses are paid from money levied from all of the owners.
There are various rules defining the powers and behaviour of the BC and these are set out in the legislation.
Leasehold – NOT at Kensington Park
A leasehold interest vests in the lessee certain occupation rights in land for a defined period of time. The rights
are created by contract between the owner of the land (lessor) and the occupier (lessee).
Remember if you purchase a dwelling or commercial building located on a piece of leasehold land – you DO
NOT OWN the land component.
Reference: Valuation Consultants New Zealand. www.vcnz.co.nz
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