FAQ's

Because we are specialists in this area, we know some questions you are likely to have.

How we work.

How is the fee split between the owners?


This is completely up to you and your neighbours. Usually, we find that the property owners want to share the fee equally, as everyone is being advantaged. However, there can be some instance where one owner can see a value uplift as being hugely advantageous for them alone, and is prepared to invest the entire fee to get that uplift. Or sometimes there is more benefit to one owner, and the owners agree to split the fee in a way that works for them.




Can I get finance on this?


Absolutely, and we can even help with this. Our experience is that banks much prefer lending on a fee simple property. We have contacts with many mortgage brokers, and can arrange for someone to get in touch to assist with this.




When is the fee paid?


To avoid disputes, and a neighbour later changing their mind and causing issues for the others, we do ask that the fee is paid into the Overend & Associates trust account before work starts. This is a solicitor's trust account, regulated by the New Zealand Law Society, and protected by the Lawyers' Fidelity Fund. Payments are then made out of that account over the duration of the project as set out in our proposal. We keep you fully informed as this occurs.




How long will all of this take?


Unfortunately, a lot of the time is waiting for Council and Land Information approvals. Overall, we recommend that you allow around 3-6 months from start to finish. If you have a cross lease property you are thinking about selling, please get in touch with us as soon as possible so we can kick off this process for you. It is also possible to start the process, and to transfer your rights and obligations under this process to a purchaser while this is ongoing. Please get in touch if you would like to ask about this, as you should include special conditions in your sale and purchase agreement in this instance.




Will you act for my neighbours too?


Yes, and that's one of the key reasons efficiencies can be made. We can do this because it is in all your interests to have the titles converted to fee simple -- so all of your interests are aligned. This is why we work on the basis that this is a pure conversion of title -- so the owners all agree that whatever covenants are on the lease for the protection of one property, those same covenants, word-for-word, are transferred to the new title. This has the result that everyone is in exactly the same position with respect to height covenants, etc, but simply with a much, much better tenure of title.




What are the advantages of using Good+Title


These are many and varied, but largely the main advantage is that the costs are known prior to even starting the process giving certainty and no surprises. In addition, there are the following advantages;

▪ You are dealing with one entity from beginning to end
▪ You are dealing with professionals who know their stuff
▪ We come to you if required – stay home and enjoy the roses
▪ There are no ongoing bills, physical works to organise, tradesmen to deal with
▪ Plus, we love dealing with people, especially you!




How does it work?


Simple. And that is our intention. You make an initial enquiry on our website, freephone or email and provide a few details about yourself and your property (street address is all we usually need for your property). We will then investigate the property, existing leases and relevant details. Then we provide you with a combined fee proposal to undertake the job from beginning to end.




Are you able to be the lawyers for my neighbours too?


Yes, it is the intention, and one of the main reasons efficiencies can be made, that Overend & Associates undertake the legal work for all parties. We can do this because it is in all your interests to have the titles converted to fee simple, so all your interests are aligned. This is why we work on the basis that this is a pure conversion of title, so the owners all agree that whatever covenants are on the lease for the protection of one property, those same covenants, word-for-word, are transferred to the new title. This is so that everyone is in exactly the same position with respect to height covenants, etc, but simply with a much, much better tenure of title. If anyone did want to renegotiate this, then we would not be able to act for all property owners, as your interests may not align. This is why we need the owner’s agreement upfront to make sure everyone is on the same page.




Will you meet me at my property?


We offer a free onsite consultation service and would be happy to come and see you at a mutually convenient time to discuss the proposal in more detail, should you so desire. Ideally this could include all property owners at once. This would also be a good opportunity for us to check the outline of the existing buildings relative to the latest unit plan to ensure the existing titles are not defective as they sit. If it is confirmed that there is a defective title, by updating your property from Cross-lease to Fee-simple it would resolve this issue at the same time. However, some people for different reasons only want to update the flats plan which would fix the defective title issue however, the property would remain as a Cross-lease if this is all that is done.





Cost & Time

How much does it cost to convert my title?


We are happy to undertake a no-obligation, free desktop investigation and will provide a detailed fixed price proposal outlining all the costs involved. This can depend on a number of factors, including the nature of the ownership, the layout of the property, the number of units, etc. As a ball-park figure, for a standard two-lot cross lease property, the cost to convert from cross lease to fee simple can vary from $14,000 - $18,000 per lease owner. It is important to note that this is an all-up cost – including planning and survey costs, plus legal fees, Landonline fees, and Council fees, which are considerable. If you are looking at attaining quotes from other companies please ensure you are comparing apples with apples. Our Survey and Legal fees are fixed which is not common in other companies.




Who is responsible for paying?


This is completely up to you and your neighbors. Usually, we find that the property owners want to share the fee equally, as everyone is being advantaged. However, in other instances where one property owner can see the uplift in values as being hugely advantageous just for them alone, they are prepared to pay the lot themselves. Or sometimes there is more benefit to one party over another, so this is split differently.




Do my neighbours need to be involved?


Disregarding who pays for the work to be done the neighbours on the Cross-Lease do need to sign the legal work involved in the process. We recommend speaking to your neighbour first to gauge if this is something they are interested in looking at.




What is the process to convert to fee-simple and how long does it take?


The process can be complex for people to do themselves. It involves 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. We usually suggest that people allow four to six months to convert from cross lease to fee simple. 1. Full site survey of property to provide relevant information as required by Council
2. Pre-application to Council outlining proposal
3. Preparation of subdivision application and submission to council for consent
4. Subdivision Consent issues and copy sent to owner’s representative
5. Survus undertake survey pegging and fixes of services and buildings
6. Preparation of eSurvey dataset (what used to be called a survey plan!)
7. Survus obtain Sec 223 Certificate
8. eSurvey dataset lodged at LINZ
9. All info to Overend Associates for processing
10. Overend Associates undertake legal work, cancel leases, prepare new documents etc
11. Survus request Sec 224 Certificate and send to Overend Associates for registration
12. New titles issue




How long does it take to convert to Fee-simple title?


Overall, we recommend that you allow around 6 months from start to finish, although we have seen these done quite a bit quicker. We have a flowchart that we can provide you which gives you an idea as to what is involved and how long each stage is likely to take.





Introduction

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. Conversely, Fee-simple tenure (also known as Freehold title) is probably the most familiar form of ownership of residential real estate in New Zealand. A Fee-simple owner is given title to the property, which includes the land and any improvements to the land in perpetuity. Aside from a few exceptions, no one can legally take that real estate from an owner with fee simple title. The fee simple owner has the right to possess, use the land and dispose of the land as he wishes – sell it, give it away, trade it for other things, lease it to others, or pass it to other upon death (all subject to any Council and financial restraints etc), without needing the consent of any other land owner.




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.




Why do I have to do anything?


When you own a cross leased property, you and your neighbour own the land together. You only lease the area shown on the Cross Lease flats plan. You may also have an exclusive use area (normally your lawn and garden). If you change the outline of your building (even adding on an additional level) then you are occupying an area outside your lease area until the Cross Lease flats plan is updated in agreement with your neighbour.




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.





CONTACT

hello@goodtitle.co.nz

0800 XLEASE (0800 953 273)

1 Byron Ave, Takapuna, Auckland

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