Fencing: Who pays?

Introduction

The Fencing Act 1978 (“the Act”) deals with the question of who pays for the erection of fencing and repairs to dividing fences between adjacent properties.  This can also be dealt with by way of a fencing covenant or agreement.  

If you are looking to buy some land, it is recommended that you first check the title to the land to see if there is a fencing covenant or agreement in place.  If there is, it is important to consider the particular implications of the fencing covenant or agreement before committing to a purchase. 

This article discusses those implications as well as the requirements of the Act.  The Act will apply in the event that there is no fencing covenant or agreement in place.

The Act

Section 9 of the Act  provides that where you are an occupier of adjoining land that is not divided by an adequate fence, you are liable to contribute in equal proportions to the costs of erecting a fence or for any work to be carried out on a fence.

However, this does not apply where there is a fencing covenant or agreement in place that is registered against the title to the land to which it relates.

Fencing covenant

A fencing covenant is an agreement between two parties where one party may not be required to contribute towards the costs of erecting a fence or the the costs of any work to be carried out on a fence. 

If you have the burden of a fencing covenant noted on the title to your land and wish to erect a boundary fence, the adjoining owner will not be required to make any contribution towards the cost.  It is usual for developers to ensure that they hold the benefit of a fencing covenant when they sell lots on subdivided land. 

If you are purchasing a rural block of land, the cost of erecting fencing will have greater financial significance.  Therefore it will be more important to make sure that, before committing to a purchase of a rural block of land, the title of the land does not give you the burden of a fencing covenant. 

If a fencing covenant is registered after 1 April 1979, it will expire automatically 12 years from the date it was registered.  Subject to this, the burden of a registered fencing covenant will run with the land.  The benefit of a fencing covenant will not bind any subsequent purchaser of the adjoining land. 

Fencing agreement

A fencing agreement works in a similar manner to a fencing covenant.  In terms of content however, a fencing agreement can also include an agreement not to erect a fence.  

A fencing agreement can be registered, allowing the benefit of the agreement to run with the land and be passed on to any subsequent purchaser.

No fencing covenant or agreement

If there is no fencing covenant or agreement that applies, the position is as per section 9 of the Act, as set out above.  Under the Act, there is a specific process that must be followed by any occupier who wants an adjoining occupier to contribute to the costs of any fencing work.

The first step is to serve a notice on the adjacent owner.  The notice must contain particular matters such as a description of the boundary along which the work will be done, details of the work that it is proposed be undertaken, an estimate of the costs for the work and details of the consequences of failure to comply with the notice.

If the adjacent owner does not agree with what is proposed in the notice, an objection can be made within 21 days by serving a cross-notice.  The adjacent owner may propose a different approach in their cross-notice.  By way of an example, they may think that the existing fence is adequate or that the proposed new fence is too expensive.  If you and your neighbour cannot agree, you can take the dispute to the Disputes Tribunal.  Under section 24A of the Act, the Disputes Tribunal can deal with fencing disputes if the dispute is regarding an amount up to $15,000 (or $20,000 by agreement between the parties).

An adjacent owner will not be required to contribute to the costs of erecting or carrying out work on a fence where:

• The work is done prior to the relevant notice being served;
• The work is done between service of the notice and before service of a cross-notice; and
• The work is done while any dispute about the work is being resolved.

Conclusion

If you are purchasing land with the burden of a fencing covenant noted on the title, your legal representative should review the covenant or agreement to confirm whether it is still subsisting.  If the land is not fenced, you will need to factor in the cost of erecting a fence on top of the purchase price.  If you do not want to erect a fence you may consider waiting until either the fencing covenant has fallen away after the 12 year expiry period or the adjoining property is sold to a new owner.

Where there is no fencing covenant or agreement, section 9 of the Act applies.  A copy of the Act can be located online.  It is self-explanatory and easy to follow.  You will also find sample notices and cross-notices and detailed information regarding the steps to be taken by both parties where there is no fencing covenant or agreement in place.  The Act can also help you to clarify whether a document noted on the title to your land is a fencing covenant or agreement. 

If you would like further information please contact Dale Thomas on 07 958 7428.