Glossary

Assets
Any property that has a monetary value or could be converted into cash (e.g. bank deposits, shares, vehicles or property).
Building Consent
Building consents are required for most types of building work to ensure compliance with the Building Act 2004 and with the New Zealand Building Code. Your City, District or Regional Council can give you more information on whether you need a building consent. In the case of the home that you have a Shared Equity loan for, you are required to obtain a building consent before any building work is commenced.
Building report
This is a report prepared by an independent expert covering the various construction aspects of your home and is designed to identify any issues that may need to be addressed prior to becoming unconditional on your purchase contract. It is good practise to ensure that you obtain such a report before settlement.
Certificate of Title
This is held at Land Information New Zealand (LINZ) and records all the legal interests in the land. When you buy your home your solicitor will register a transfer of the land to you and your name will be recorded as the owner on the Certificate of Title.
Code Compliance Certificate
A code compliance certificate is a legally required statement from your council that confirms that the building work complies with the building code and with the building consent. You will need to apply for a code compliance certificate when the work is completed.
Conditional agreement
An agreement that is subject to conditions. Your contract cannot be considered unconditional until all conditions have been met. You should discuss any conditions on your agreement to buy a home with your lawyer.
Confirmed finance
It is common when buying a home for the purchaser to insert a clause that allows them time to obtain suitable finance for the purchase of the property. Such a clause is termed a conditional finance clause and once the buyer has arranged their finance the clause is confirmed with their solicitor who informs the vendors' solicitor. This actions constitutes the confirmation of finance. When looking to secure a Shared Equity loan you will need to ensure that any agreement you enter into to purchase your home has a conditional finance clause included. Your should seek details on this from your solicitor.
Cross-lease property
A form of ownership that often applies to townhouses and flats. All the owners have a share in the ownership of the land, but have a lease of the townhouse or flat they live in and (often) exclusive rights to use specific pieces of land or a garage. You can in some circumstances obtain a Shared Equity loan against cross lease property.
Default
You're considered to be in default of your Shared Equity loan if you fail to follow the requirements that you agreed to in your loan agreement.
Deposit
The amount of money you contribute to the purchase price of the home. With a Shared Equity loan this must be a minimum of 5 percent of the purchase price.
Developer
A person who purchases land with the view to building houses and other facilities to then sell to others to occupy. In some cases the developer may simply obtain title to the various sections of land and sell the sections to the public.
First mortgage
A bank home loan is secured by a first mortgage. This is the ‘security' to the bank to ensure the loan is repaid. In the case of your shared equity loan this will be the loan provided by Kiwibank.
Fixed price contract
A firm fixed-price contract provides for a price that is not subject to any adjustment. This type of contract ensures the contractor has maximum risk and full responsibility for all costs. It provides maximum incentive for the contractor to control costs and perform effectively.
Freehold property
Ownership of the land and the house with no restrictions on your ownership rights, apart from those covered by laws or regulations. When obtaining your Shared Equity loan you would normally be borrowing against freehold land unless it is a lease title.
House price level
Is the maximum value you can purchase for a house. The house price levels are calculated quarterly and are based on the house sales in each region in the previous quarter. To qualify for a shared equity loan the house price level is set at 90 percent of the lower quartile price of a house in one of the five qualifying areas.
Insurance Certificate
This is a certificate issued by your insurer that confirms the assets you have covered and the maximum amount that can be paid out in the event of a loss.
Leasehold property
A leasehold exists where the owner of the property (lessor) allows for a person (lessee) to have exclusive possession of the property for a period of time paying a rental for the occupancy of that property.
LIM
The LIM Report (Land Information Memorandum) which is available from the local authority, provides information about plumbing, drainage, issued consents and permits, compliance schedules, licences, special site features, swimming pool fence requirements, unsatisfied requisitions and a host of other details about the property. When applying for a Shared Equity loan you are required to provide a copy of the LIM with your Loan Application form once you have found the home you wish to buy.
Loan term
The period of time your loan is for – normally 25 or 30 years, or until the house is sold. In the case of your Shared Equity loan the term will be the same term as your normal home loan. You may not extend this term in the case of your Shared Equity loan.
Lower quartile
The lower quartile is the cut off point for the bottom quarter of property sale prices for a region. It means that 25 percent of all properties sold there were cheaper than the lower quartile value. Housing New Zealand will update this lower quartile value every three months, using QV data, and publish the results on this website.
Mortgagee
This is the bank that lends you the money.
Mortgagor
This is the person who borrows the money.
Perpetually renewable lease
This refers to a lease where the holder of the lease is entitled to the perpetual renewal of the lease for a number of years. To be eligible for a Shared Equity loan a house purchased on leasehold land must be perpetually renewable or have at least 100 years remaining on the lease, and the next right of renewal must be longer than the term of the loan.
Pre-approval
In the case of the Shared Equity loan, your loan will be pre-approved once your application has met the eligibility criteria and you have been successful in the monthly ballot process. At that time you will be issued with a Pre-Approval Certificate to enable you to begin looking for your home.
Principal
The original dollar amount of the normal loan borrowed from a lender. For example if you borrow $180,000 from Kiwibank for your Shared Equity loan then the amount of the principal is $180,000.
Progress payments
Payments you make to a developer during the construction phase of the home.
Realisable or discretionary assets
Any asset that could be converted to cash. This would include such assets as shares, investments, collectables (e.g. stamps) additional vehicles (such as vintage cars) etc.
Refinance
This term normally relates to replacing your loan with a new loan or changing the structure of your loan. In the case of your Shared Equity loan you may not refinance your loan with another lender. Alternatively, if you wish to restructure your existing loan with Kiwibank then Housing New Zealand will need to approve any changes to your loan.
Replacement cost
If you're insured for replacement costs and your home is destroyed, your insurer will pay to restore your home to as it was when it was new, using up to date materials and building methods.
Resource consent
Resource consents cover work on your property that may have an effect on the environment, such as diverting a stream and undertaking major earthworks. Contact your City, District or Regional Council for more information.
Right of renewal
A lease agreement will include a right of renewal of the lease where the parties can agree on a new lease period, terms of the lease and the lease payments payable under the lease.
Sale and purchase agreement
The legal document that records the agreement to sell and buy a house. It is a legally binding contract when signed by the buyer and seller.
Second mortgage
A Shared Equity loan is secured by a second mortgage on the property. This is Housing New Zealand's security to ensure the loan is repaid.
Settlement date
The settlement date is the date when you and the house seller exchange money for property ownership documents. It's often the same date as the possession date (the day you move in).
Unconditional agreement
A legally binding agreement that has no conditions or where all conditions have been met. Once your agreement to buy a home is unconditional then you are legally bound to complete the transaction.
Unit title property
This is where multiple owners hold a type of property ownership known as a unit title. Such building developments are typically apartment blocks and townhouses. Unit owners in a unit title development own a defined part of the building, such as an apartment, and may have shared ownership in common areas such as lifts, lobbies or driveways. Collectively, all the unit owners in a building development make up a body corporate. The body corporate has responsibility for a range of management, financial and administrative matters relating to the common property and to the building as a whole.