Cross Lease Titles

A cross lease title is a legal document which describes your rights regarding the land which the title is registered against. With this title, you share the land with other owners—all of whom have an equal portion—and enjoy exclusive use of a flat or building which is leased from the other owners. These exclusive use areas may include buildings, or other areas set out on the cross lease flats plan. Common areas such as driveways are held in common ownership with all the owners.

As experts in Auckland cross lease property, we can help you manage this often-confusing area of property ownership.

Where did cross lease titles come from?

Cross lease titles were popularised in the 1960s and 70s as a cheaper form of subdivision, not requiring the same council scrutiny as a traditional fee simple subdivision. The reasoning for this was that this form of land development did not constitute a ‘subdivision’. In this way, developers were able to avoid paying expensive development contributions, avoiding being subject to the same scrutiny that a typical fee simple subdivision would require.

Is my property title a cross lease?

Your property title will outline if your property is cross lease, fee simple or unit title.

If you are unsure what type of title your real estate property holds, you can call our team to look into your property and advise you free of charge.

What is a Cross Lease Flats Plan?

A cross lease flats plan is a legal document drawn up by a Licensed Cadastral Surveyor. The cross lease flats plan accurately depicts the leased areas, such as your buildings, exclusive use areas, and areas held in common ownership such as shared driveways. It is a graphical representation of the interest registered on your title, and should be read in conjunction with your title. 

Are there any disadvantages of a cross lease?

Cross leases can be a trickier form of ownership, particularly if you or the other leaseholders want to develop your site or carry out work on your buildings. All external building works will require written consent from the other leaseholders, including any banks with a registered interest. If permission is not gained from co-leaseholders, this can result in a civil matter and work may be halted.

All building amendments also need to be registered on an updated flats plan, adding extra costs to any development.

As a less understood form of ownership, this can impact on the sales price of your site. As a rule of thumb, that means cross lease properties generally sell for less than similar fee simple properties.

Is owning a cross lease property all bad?

Not at all! Having an equal share in the underlying parcel of land means that any development of the site allows Auckland Unitary Planning rules for building and inaccessible areas to be assessed against the whole site. This often allows the construction of a larger building than is possible on a fee simple title, adding extra value to the property. Of course, this will have to be signed off by your co-leaseholders.

Requiring approval from the other leaseholders can be a nuisance if you are developing your site. Conversely, it can give you some control over the development of the rest of the property. If the other leaseholders wish to build—blocking your views or impacting on the value of your property in the process—you can restrict these works.   

Cross lease to fee simple conversions

A conversion is the changing of a cross lease title to fee simple title. This has the advantage of sole ownership of your property, and the rights to use that land as you like. To many, this makes it much easier to understand property rights, and typically increases the value of the property.

Our Cross Lease to Fee Simple Conversion page details the steps to convert to Fee Simple.

What is a deficient cross lease title? 

A deficient title occurs when the onsite buildings, decks and exclusive use areas don’t match those on your cross lease flats plan. A deficient title may cause uncertainty for potential buyers, bank lending, and property insurances.

Our page on Deficient Cross Lease Titles is an excellent source to answer all your questions.

Call our team today for a free consultation on your cross lease property in New Zealand.

Cross Lease to Fee Simple Conversion
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