Cross-Lease to Fee-Simple

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 late 1950s as a ‘non-subdivision’ method to get a separate title for the 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, and Councils generally had separate requirements for units on fee-simple titles that allowed for increased density of development. It was commonly used for townhouses and flats, however more recently prior to the RMA determining cross-lease as a ‘subdivision’, this form of tenure was also used to build full-sized dwellings as well. No new developments use this form of tenure, however with many existing dwellings having been altered since they were built, there are a lot of ‘up-dated’ cross-lease subdivisions being undertaken.

Why you may need to convert to fee-simple?

A cross-lease title simply isn’t as good a title as a fee-simple title, because your neighbour is a co-owner of your land, and you need your neighbour’s permission for things that a freehold (fee-simple) owner wouldn’t. For example, any alterations to the property – even something as simple as changing a window to a French-door – could require your neighbour’s consent. If your neighbour refuses consent, and you go ahead, you may be required to take your alterations down (worst case scenario). Any variation to the building outlines on a cross-lease flats plan makes the title defective, and this needs to be updated with a new flats plan to rectify the title. Converting your title to fee-simple tenure cancels any cross-lease agreement, and gives the respective land-owners full un-impeded rights to their share, alleviating any future issues with consenting and redevelopment of the properties.

Why engage Survus?

We are passionate about getting cross-lease owners onto a fee-simple title. As there is always more than one property (and usually owners) involved, we specialise in working with all landowners to get these proposals over the line. We will provide all parties with a detailed proposal outlining the work and costs involved in converting your title to fee-simple tenure. Our team will project manage the whole process from beginning to end, including fixed price legal fees if you require them, making the whole process seamless and stress-free for all parties involved.