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Cross-lease to Fee-simple

If we haven't answered your burning questions below, call our team for a free, no obligation chat; if we don't know the answer we will always find out. 

What you need to know

VALUE

Property is likely to increase in value on completion of the process (depending on location etc).

OWNERSHIP

Fee-simple tenure is the best form of tenure you can have in New Zealand

TIME FRAME

This is a 6-8 month process to complete. 

CONSENT

Changing to fee-simple tenure is a subdivision process, so requires a subdivision consent from Council.

AGREEMENT

In order for this to proceed, all property owners on the cross-lease need to be in agreement, disregarding who pays for it.

ALTERATIONS

Changing to fee-simple gives you freedom and the right to do what you want with your property without neighbours consent

About changing from cross-lease to fee-simple tenure. 

Changing from Cross-lease to fee-simple

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 in respect of your property.

 

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 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).

Cross-lease properties are often the subject of neighbour disputes, and the legal process involved in resolving any dispute is not easy and can be very expensive. There is historically a value discount applied to cross-lease properties (we have the evidence to prove it!) – a fee-simple property is frequently worth more, and is easier to sell. But there is also a greater benefit than just money: the ability to make your home the way you want it, without needing your neighbour’s consent, and without the ongoing costs of needing to update the Flats Plan on your title after each alteration.

What is involved

To convert from cross-lease to fee-simple?

The process is complex, generally far too complex for people to manage themselves. It involves a full subdivision consent application which needs to be approved by the council, and a full legal subdivision of the property, including 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.

Cross-lease to fee-simple process

This process has been created to show you the steps involved in converting from cross-lease to fee-simple. It should be used as a guide only.

 

This process takes between 6-8 months to complete.

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STAGE ONE

  • Lawyer investigates titles and existing leases.

  • CCTV Inspection by independent drainage company

  • Engineer reviews CCTV + report

  • Quotes for hydro clean/repairs

  • Work done and new CCTV + report prepared

STAGE TWO

  • Site measure up

  • Levels (where required)

  • Preparation of scheme plan

STAGE THREE

  • Scheme plan to client for approval

  • Lawyer reviews scheme plan and prepares initial easements.

STAGE FOUR

  • Preparation of council application

  • Council application submitted

  • Council consent approved and sent to client

STAGE FIVE

  • Pre calculations in office

  • Survus goes onsite to place pegs

STAGE SIX

  • Create legal survey plan (CSD - Cadastral Survey Dataset)

STAGE SEVEN

  • Plan proceeds through internal QA process

  • Requests 223 Certificate once all required easements are confirmed.

STAGE EIGHT

  • Lodge plan with LINZ (Land Information New Zealand)

  • Request 224 Certificate

  • Survus work is now completed

STAGE NINE

  • Lawyer seeks consent from your mortgagee for the change.

  • You & your neighbours sign new paperwork with lawyer

  • Lawyer requests new titles

  • New titles issued

Frequently asked questions

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.




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.




Why should Cross Lease owners 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, 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. Cross lease properties are often the subject of neighbour disputes, and resolving any dispute is not easy and very expensive. There is therefore often a value discount applied to cross-lease properties – a fee simple property is frequently worth more, and is easier to sell. But there is also a greater benefit than just money: the ability to make your house the way you want, without needing your neighbour’s consent, and without the ongoing costs of needing to update the flat plan on your title after each alteration.




What is the difference between cross lease and fee simple? What kinds of properties are likely to be on cross lease titles?


Fee simple is what people think of as a freehold title – you own the land totally and (subject to planning restrictions) can do what you like on it without needing your neighbour’s permission. Cross lease titles were invented in the early 1960s to get around subdivision rules. The neighbours jointly own all the land, but lease the buildings to each other. The North Shore has a very high proportion of cross lease titles, which aren’t limited to townhouses or flats – they can be separate independent houses.





We have helped many clients with cross lease properties, we can help you too.

Our knowledgeable team are ready to answer any questions you have about your cross lease. 

CONTACT

hello@goodtitle.co.nz

0800 XLEASE (0800 953 273)

17 Esmonde Road, Takapuna, Auckland 0622

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