Cross Leases2018-08-23T00:17:21+00:00

Do you own a Cross-lease property?

So, you are thinking about converting your property from a cross lease to a fee simple title? Congratulations – this is one of the best things you could do for your property. Cross leases have a long history of causing difficulties for their owners, and this is reflected in a value-discount being applied to them. So why haven’t you thought about this before? Or have you?

The chances are that it all seemed too hard, or too expensive, well we have a solution for you. We have teamed up with a specialist property law firm to give people like you a “one stop agency” who takes care of the entire cross lease to fee simple process under the brand  “Good Title“, read below for more information.

What is a Cross-lease?

A Cross-lease form of tenure is where multiple individuals own an undivided share of land, which they build on, with the land being leased from the other owners, often for a term of 999 years. It started in the early 1970’s to get a separate title for land, often while avoiding the subdivision rules and contribution requirements at that time. This made it significantly cheaper than subdividing by way of Fee-simple titles. It was commonly used for townhouses and flats, although most new developments no longer use this form of tenure.

What are the difficulties with Cross-lease properties?

There are important considerations for owning a Cross-lease property, as the joint ownership of the underlying land creates limitations and increases the checks that you will need to do before purchasing. Selling a cross lease property also requires extra care, as it can really complicate the sales process if there are problems with the Cross-lease flats plan.

  • You are required to get permission from your other title owners if you want to add any additions to your home – this can often cause problems because they can say no.
  • When you buy or sell your property, the relevant flat plan needs to match exactly what the buildings are on the property. If they do not, this is what is referred to as a defective title. As well as your solicitor, not likely to approve the title for purchase, you also may not get a mortgage approved until it is corrected or updated. This can take between 12-18 weeks, which can delay the sale of your home
  • Because of the proximity of some cross-lease neighbours, and because of personality differences, tensions can arise that would not normally be a problem on non – cross lease properties where getting on with your neighbour doesn’t impact on your legal position.
  • The garden area on a cross-lease property may be shown as “common ground” on a Flat Plan, meaning this area could be used for a party by other owners in the complex.
  • Any changes to the exterior shape and dimensions of buildings require a new flats plan and /or cross lease variation. This typically includes the addition of a conservatory or the erection of a new garage, some of the most common offending causes.

How do I know if my Cross-lease title is defective?

If the buildings on site do not match your Cross-Lease flats plan, then your title is probably defective. If this is the case then we advise that you either rectify the Cross-Lease flats plan, or even better, convert your property to a Fee-simple title. Although the conversion to Fee-simple is more expensive that an updated Cross-lease plan, in most cases we strongly recommend converting Cross-lease properties to freehold, particularly in the Auckland area, due to the often-significant uplift in values.

What are some of the advantages of Fee-simple titles?

  • If and when you decide to sell, having a Fee-simple title makes it easier to sell the property and increases its marketability and sale value;
  • You have much greater flexibility in what you can do with your property, in particular additions and alterations to the property;
  • It makes it more likely for you to avoid any neighbour disputes.

Can I convert to a Fee-simple Title (aka Good Title)?

Yes, and this is what we specialise in at GOOD+TITLE. This is typically called a ‘change of tenure’ subdivision. It is important to know that this does involve a full subdivision consent application which needs to be approved by council, and a full survey of the property including the placement of pegs etc. that needs to be approved by LINZ. All properties on the Cross-lease must be accounted for in the subdivision and all the owners are required to sign the final documents.

Who are we? 

GOOD+TITLE is the only specialised, professional joint venture service between one of New Zealand’s only specialist property law firms Overend & Associates and the long established innovative surveying practice Survus Consultants. Together, our combined experience and expertise to bring you a ‘one-stop agency’ and fixed prices for converting your cross-lease to fee simple in both the Auckland District and wider Canterbury areas.