KEY POINTS:
Q. I own a large rural property covered in regenerating native bush and some pockets of more mature native trees. I am interested in protecting the bush for future generations and have heard that a QEII covenant can be a good way to do this. What is a QEII covenant exactly and how would it affect the future use of my property? Would I be able to obtain rates relief from my local council if I agreed to have a covenant put it place?
A. Open space covenants (or QEII covenants as they are more commonly known) are covenants entered into under the Queen Elizabeth the Second National Trust Act 1977 with the Queen Elizabeth the Second Trust. The act was passed on the 25th anniversary of the coronation of Queen Elizabeth II. The purpose of the act and trust is to "encourage and promote, for the benefit and enjoyment of future generations of New Zealanders, the provision, protection, preservation, and enhancement of open space".
Open space is defined under the act as "any area of land, or body of water, that serves to preserve, or to facilitate the preservation of a landscape of aesthetic, cultural, recreational, scenic, scientific or social interest or value". So, although QEII covenants are most commonly used to protect native flora and fauna on rural properties, QEII covenants can also potentially be used to protect a range of other values as well.
Since the act was passed 30 years ago this year, more than 1000 QEII covenants have been registered on certificates of title around the country, protecting about 40,000 hectares of land.
Another 350 or so covenants have been approved by the trust board but not yet registered on certificates of title. Once these are registered, an additional 60,000 hectares or so of land will be subject to QEII covenants. QEII covenants are, therefore, a popular way for owners of land to ensure that particular valued characteristics of that land are protected for the enjoyment of future generations.
A QEII covenant is an agreement entered into between you and the trust. The trust has the "benefit" of the covenant. Once the covenant is registered on your Certificate of Title, the trust can bring an action against you in court for breach of the covenant if you act inconsistently with any of the covenant's terms - such as if you cut down trees that were protected by the terms of a covenant.
A QEII covenant may be perpetual (forever) or for a specified length of time. Like other types of covenant, a QEII covenant "runs with the land" and will bind future owners if the land is sold.
So, although a QEII covenant is registered over part of your land, you will still be the legal owner of that land, the terms of the covenant may severely restrict what you can do on that land.
It could also, in some circumstances, lower the market value of your property by reducing the land's development potential.
This means that if a QEII covenant is to be registered over your property, it is important you are happy with its terms such as:
* What parts of your land the covenant applies to.
* What activities are allowed or prohibited.
* How long the covenant applies for.
In particular, the covenant should specify whether members of the public are to have rights of access to the covenanted land and, if so, on what terms.
If a QEII covenant is registered on your property, you may be able to obtain assistance from the trust to preserve and manage that part of your land, or the trust may agree to pay your rates or part of the rates for your property.
Some councils have policies offering rates relief to property owners who register QEII covenants or other forms of open space covenants (such as covenants with the Department of Conservation or covenants under the Reserves Act) over their properties.
* The information contained in Prime Assets is intended to provide general information in summary form current at the time of printing. The contents do not constitute legal advice and should not be relied on as such. Specialist advice should be sought in particular matters.
