Cross-lease to fee-simple titles

Changing your cross-lease to fee-simple titles can instantly add between 7-20% to the sale price of your property. In the current Auckland market, that’s an average of $100-300k.

We make the process so simple, it’s the easiest way to enhance the value of your home.

SPEAK TO A CROSS LEASE EXPERT

Changing from cross-lease 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 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 to agree, 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.

Get total ownership of your home with a fee-simple title. The process can take time, so get started today with a quick enquiry now.

What you need to know

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

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 neighbors consent

VALUE

Your property is highly 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 process can take between 10-12 months plus physical works.

What is involved To convert from cross-lease to fee-simple?

Changing a title from cross-lease is a form of subdivision and as such can be a complex process. It starts with a full subdivision consent application which needs to be approved by the council, and a full legal subdivision of the property, including a full land-transfer 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 Estimated Timeline

Frequently asked questions

What is the difference between cross-lease and fee-simple? What kind 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. Auckland in general, and in particular 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.

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 to 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 can be 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 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 flat 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 don't, 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 14-18 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 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 flat plan. This typically includes the addition of a conservatory or the erection of a new garage or carport, some of the most common offending causes.

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

Can I convert to a fee-simple title (aka a good title)?

Yes, and this is what we specialize 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 the 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.

Are there any development contributions payable for changing a cross-lease title to fee-simple?

Are there any development contributions payable for subdividing a minor unit?

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

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

CONTACT

hello@goodtitle.co.nz

0800 XLEASE (953 273)

24a Sheffield Crescent, Burnside, Christchurch 8053

17 Esmonde Road, Takapuna, Auckland 0622