Building on ancestral Māori Land – make sure your tripartite deeds are comprehensive…

When whānau members are wanting to build on land owned by a Maori land trust or Maori incorporation, and are obtaining mortgage finance or other financial assistance to do so, it is common for the whānau members to enter into a tripartite deed (that is, a deed with three parties) between the owners of the land, the lender and the whānau members building on the land.  

In the recent Māori Appellate Court decision, the Court considered the role of tripartite deeds in determining whether a house was a fixture or a chattel. The facts of the case involved a couple who had built a home on Māori freehold land, entering into a tripartite deed between themselves, Housing New Zealand and the trustees who administered the land. On the passing of the survivor of the couple, an application was filed to the Court to determine ownership of the house.  The executor of the Will wanted the house to be determined to be a chattel, so it could be called in under the Will of the deceased to pay estate debts.

In 2020, the Māori Land Court held that the deceased was the owner of the house, and that the house was a fixture.

The executor of the estate appealed the decision, arguing that house should be classed as a chattel. Generally in property law, based on previous Court cases, the test for whether something is a chattel or a fixture is to consider the degree and purpose of annexation, including whether the structure can be removed. The Court outlined that this does not mean that a structure which may be removed must be a chattel, only that it may be classed as one depending on the purpose of annexation. The Court noted that this assessment must be made based on the circumstances of the case.  Following this approach, the Court then considered the purpose of annexation.

The tripartite deed was held to be relevant in assessing the purpose of annexation. The Court noted that the tripartite deed made specific mention of the fact that the house must be capable of removal. This was for security under the deed, such that if the owners defaulted, Housing New Zealand could reclaim the home.  It did not however record it as a chattel.

The Court also considered that:

•        The deed did not expressly state that the house was to be regarded as a chattel;
•        The house, as a question of fact, was fixed to the land and had become part of the realty/land; and
•        It was only if Housing New Zealand exercised its rights upon default, and uplifted the house, that it was           severed and became a chattel.

The Court’s assessment of the property in this case was that the purpose of erecting the property was for it to become a permanent home for the owners. While the house would become a chattel on default, this did not distract from the original, overriding purpose of the house as a permanent fixture. On this ground, the appeal was dismissed. 

This case provides a good example of the role of tripartite deeds in relation to building on Māori land, and the need for those entering into such deeds to carefully consider what should be included in such deed.

It is important to consider not only the current purposes of the deed, but also any future implications, in particular in relation to estate planning for those building on the land. Those taking part in such arrangements should make sure their Wills align with the tripartite deed, to avoid any scenarios like the above.

Building on Māori land is complex, legally, so it pays to take advice from a legal advisor experienced in this area.