How to Read Encumbrances on Your NZ Property Title: A Practical Guide

What Are Encumbrances on a Property Title?

An encumbrance is anything registered on a property title that limits or affects the owner's full rights over the land. When you buy a property in New Zealand, you're not just buying the physical land and buildings — you're also buying every encumbrance attached to the title. Some are minor (a drainage easement along the boundary). Others can be deal-breakers (a covenant banning you from building a second dwelling).

The Record of Title lists all registered encumbrances in the "Encumbrances" section. Each entry includes a reference number, the type of encumbrance, and the date it was registered. But the title itself doesn't spell out the details — you need to order the underlying instrument document ($39.90) to see the full terms.

The Five Types of Encumbrances You'll Find

1. Easements

Easements give someone else the right to use part of your property for a specific purpose. Common examples:

• Right of way — a neighbour's right to drive across your land to reach their property
• Right to convey water — the right to run water pipes through your land
• Drainage easement — allows stormwater or wastewater to flow through your property
• Utility easement — gives power, gas, or telecommunications companies access to infrastructure on your land

What to check: The easement instrument specifies the exact area of land affected, who benefits, and what maintenance obligations exist. A survey plan ($49.90) will show the easement area on the property plan.

2. Covenants

Covenants are promises registered on the title that restrict or require certain actions. They're especially common in new subdivisions and lifestyle blocks:

• Building covenants — minimum house sizes, required materials, colour schemes
• No-subdivision covenants — prevent the land being subdivided
• Residential-use-only covenants — ban commercial activities
• Landscaping covenants — require specific planting or front-yard maintenance

Covenants can be positive (you must do something) or negative/restrictive (you must not do something). Both are enforceable, and both can significantly affect your property's value and usefulness.

3. Consent Notices

Consent notices are registered under Section 221 of the Resource Management Act. They record conditions that the council imposed when granting resource consent for subdivision or land use. Common in Hamilton, Auckland, and Christchurch new developments:

• Stormwater management requirements
• Building platform restrictions
• Geotechnical conditions (especially on hillside or reclaimed land)
• Network utility requirements

Consent notices run with the land — they bind every future owner, not just the original developer. Check our guide on consent notices under Section 221 RMA for more detail.

4. Caveats

A caveat is a formal warning that someone claims an interest in the property. It prevents dealings with the title until the caveat is resolved or removed. Common reasons for caveats:

• A buyer who has signed a sale and purchase agreement but settlement hasn't happened yet
• A contractor claiming unpaid work
• A family member claiming an interest through a trust or relationship property arrangement

Caveats are serious. If you see one on a title you're considering buying, stop and investigate before proceeding. Read our article on property caveats in New Zealand for the full picture.

5. Statutory Land Charges

These are charges registered under specific legislation:

• Building Act charges — for properties with outstanding building compliance issues
• Local authority rates liens — for unpaid rates
• Heritage New Zealand entries — for heritage-protected properties

How to Read the Encumbrances Section of Your Title

When you receive your Record of Title ($42.90), the encumbrances section appears after the estate description and area. Here's what each line means:

Format: Reference | Type | Date Registered | Details

Example:

754321 | Easement | 15/03/2019 | Right of way over part Lot 4 DP 55678

This tells you:

• 754321 — the instrument number you'd use to order the full document
• Easement — the type of encumbrance
• 15/03/2019 — when it was registered (so you know if it's recent or decades old)
• Right of way over part Lot 4 DP 55678 — a brief description of what it covers

The brief description on the title is just a summary. For the full terms — exactly which part of the land is affected, who benefits, and what obligations exist — you need to order the underlying instrument ($39.90).

Red Flags: When Encumbrances Should Make You Think Twice

Not all encumbrances are problems. A standard right-of-way easement on a shared driveway is normal and expected. But some should make you pause:

What to Do When You Find Encumbrances

Step 1: Get the Full Picture

Order the complete title package — not just the Record of Title, but the instruments behind each encumbrance. The Pre-Purchase Package ($189.90) includes the Record of Title, Historical Title, Survey Plan, and Instruments — everything you need.

Step 2: Read the Instruments

Each encumbrance has a full legal document behind it. Read it carefully, or have your lawyer review it. Pay special attention to:

• Exactly which area of land is affected
• Who benefits from the encumbrance
• What obligations fall on the property owner
• Whether the encumbrance expires or is perpetual

Step 3: Cross-Reference with the Survey Plan

The survey plan ($49.90) shows easements and encumbrances graphically. You can see exactly where on the property the right of way runs, where the drainage easement sits, and how much land is affected.

Step 4: Get Legal Advice If Needed

If encumbrances are complex — multiple covenants, unusual easements, or caveats — get your lawyer involved before you commit. Some encumbrances can be removed or varied, but it requires legal process and sometimes the consent of other parties.

Can Encumbrances Be Removed?

Some can, some can't:

• Easements can sometimes be removed if the benefiting party no longer needs them and agrees to the removal. See our guide on how to remove an easement from a property title in NZ.
• Covenants can be removed or varied by application to the court, or sometimes by the original covenantor. This is not straightforward — read about the process in our article on removing covenants from a property title.
• Consent notices are extremely difficult to remove — they're tied to resource consent conditions and generally run with the land permanently.
• Caveats can be removed if the underlying claim is resolved or lapses. See how to remove a caveat from a property title.

How to Order an Encumbrance Search

To check encumbrances on any NZ property:

1. Order a Record of Title with Diagram ($42.90) — this shows all registered encumbrances
2. For each encumbrance, order the underlying instrument ($39.90) to read the full terms
3. If the property is cross-lease or has boundary issues, add a survey plan ($49.90)
4. For comprehensive pre-purchase due diligence, order the Pre-Purchase Package ($189.90)

Frequently Asked Questions

What's the difference between an encumbrance and a caveat?

An encumbrance is a registered right or restriction that runs with the land — like an easement or covenant. A caveat is a temporary warning that someone claims an interest in the property. Caveats are meant to be resolved; encumbrances are permanent (unless removed through legal process). Both appear in the encumbrances section of the title, but they serve different purposes. For a detailed comparison, see our guide on encumbrances vs caveats on NZ property titles.

Do all properties have encumbrances?

No, but most do. Even a simple residential freehold property may have a drainage easement or utility right of way. New subdivisions typically come with multiple covenants. The only way to know for sure is to check the title. Order a Record of Title ($42.90) to see exactly what's registered.

Can I buy a property with encumbrances?

Yes — most properties have them. The question is whether the encumbrances are acceptable to you. A standard drainage easement is rarely a problem. A covenant preventing you from building the house you want is a different story. Always read the full instrument documents before deciding. The Pre-Purchase Package ($189.90) gives you everything you need to make an informed decision.