CHECKLIST FOR BUYING A LIFESTYLE BLOCK
When buying a lifestyle block, there is much due diligence to be carried out mostly due to legal descriptions, zoning, utilities and buildings.
There are legalities to check such as resource consents, septic tanks, easements and zoning rules. We highlight many considerations to help ensure you go into the process with the big picture in mind and your eyes wide open.
First, WHAT ARE YOUR INTENTIONS?
Do you want a change of lifestyle and are seeking out a property that is perfect as is?
Do you plan to run it as a commercial endeavour or as a lifestyle hobby with a few chickens and paddock pets?
Do you intend to buy an under-developed block that you can work at and mould to your personal vision?
Do you want to buy a bare block of land to develop into a lifestyle block from scratch?
Do you have intentions to sub-divide it in the future?
The questions below will help you find out almost everything you need to know, when you most need it.
You may own a house and need to sell it to purchase a lifestyle property. To establish what equity you will have, start with a market appraisal to help steer you to properties in your price range.
Find out more about getting an accurate real estate appraisal first.
More technical questions to ask
Some of the questions you may want to ask yourself and the vendor's real estate agent about buying a lifestyle property:
- What is the source of water? Town supply, bore or rain collection? Is the bore water shared or is there an easement?
- Is the land sub-dividable?
- What is the quality of broadband and cell phone coverage? Rural areas do not yet all have the fast broadband speed of urban areas and some places are cell phone dead spots.
- What is the existing building and resource consent status for the property?
- Will you be able to get building and resource consent for your plans under local government plans?
- Is it prone to flooding or slip hazards?
- What is the permitted land use?
- What is the type and quality of fencing? Is it fit for purpose?
- What provisions are made for local schools e.g. school buses?
- Is there a septic tank? Septic tanks are common in rural areas. Cleaning these prior to settlement can be a condition of purchase.
Do not rely entirely on what real estate agents tell you as they are not lawyers. We recommend that your lawyer checks your sale and purchase agreement prior to you signing it.
Find out about building consents and resource consents
LEGAL INSIGHTS SPECIFIC TO LIFESTYLE BLOCKS
When looking at buying a lifestyle property it is important to question the real estate agent thoroughly. They are obliged to tell you of any issues they are aware of.
It is also important to have the back-up of a property lawyer to check on legal descriptions and rules:
Easements
In rural areas easements are often in place that allow neighbours access to such things as water supply, shared driveways and access to their land across the lifestyle property. In the case of shared driveways, find out about potential costs for maintenance.
Land Covenants
Covenants may be in place carrying conditions that could prevent your business, building or animal keeping plans from being realized. Covenants can be used to ensure the buyer of a lifestyle block cannot object to neighbouring farming activities or build a house in certain areas. Covenants can cover the type of land use that is allowed, prevent certain domestic animals or require that the land be maintained to a prescribed standard. It’s very important to read the fine print before committing to any purchase.
Zoning rules and activities on surrounding properties
rural life is not always the peaceful, quiet environment you might imagine so be sure you know what to expect, for instance effluent spreading, harvesting, fertilizer spreading and spraying.
GST
Ask your lawyer or accountant to find out if GST will apply. The vendor may be registered for GST and the property price may be inclusive or exclusive of GST. GST usually depends on the size and scale of the property. Most agree unless it is a large lifestyle property being run as a commercial enterprise it’s best not to register for GST but obtain advice about this.
BUYING A BARE BLOCK OF LAND
Buying a bare block of land is one way to get a foot on the lifestyle block ladder, but there are issues you will need to understand and resolve.
- Bare land is often not connected to water and sewage systems.
- Will you get resource consent for your plans, including sewage management?
- How will you get water to your property?
- How will you get power to the land? In some cases connecting to the electrical grid will be prohibitive and you will need to explore your off-grid options.
- What is the cost of putting in an access road if needed?
- What covenants will affect your plans, for instance the size and standard of the dwelling?
- Find out about council mandated setback zones which may dictate where you can and can’t build.
Make sure you check the Sale and Purchase Agreement to ensure the transfer of existing resource consents for water and sewage.
The need for resource consent can depend on whether you are planning a commercial operation.
Lifestyle block or lifestyle sentence check?
Another important thing to understand is the time, physical effort and commitment involved in managing a bigger property, especially where animals and larger lawns to mow are involved.
Animals require daily care and attention and you will not be able to just up and leave at a moment's notice to go away for a long weekend or a holiday without having made arrangements for their care.
Bigger animals take confidence to manage and you need to be able to afford to feed and care for them properly and pay for vet bills.
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Article created May 21, 2021 | About
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