Cross Lease Properties

A lot of people are not aware that when you change a building footprint on a cross-lease property, this creates a defective title. There is an Easy Way to correct this, and there is a Better Way to correct this.

The Easy Way

The easy way is to update your cross-lease title. This involves an application to Council. Council will check to ensure everything is built on site as per approved consents. Council then issues a Subdivision Resource Consent. If things need to be fixed on-site, then those items will be a condition of the consent. Most commonly, there are no conditions except signing off the Legal survey Plan.

Once we have Council’s sign-off for the Legal plan, we will lodge it with Land Information NZ, and your solicitor will apply for the new titles to be issued. This process may take six months, even if no physical work is required. The costs are often over $10,000, and this would increase if there were physical work to be completed. Your Cross Lease Neighbours will need to sign off on the updated title.

The Better Way

The better way is to convert your cross-lease title into a freehold title. The benefits of a Freehold title include never updating your title again, not needing to consult your neighbours for building changes, and clearly defined boundaries and easement rights. The value of your property will increase.

When converting to a freehold title, we must deal with ALL the cross-lease owners, as all the titles will become Freehold. Getting the other owners on board is the first hurdle. We will then survey the whole property and draw a proposed subdivision plan, which we recommend all the owners use to enter into a formal agreement with each other.

In preparing a Resource Consent application, we must demonstrate to Council how each property is serviced and how that service will continue after separate titles are issued. These services include Electricity, Telecommunications, Water Supply, Sewage and Storm Water. Sometimes we can protect these services by creating easements, and sometimes these services need to be relocated. Shared services will need to be separated.

Flats with shared walls will often require a report from a Fire Engineer, and vehicle access must be assessed against the current standards. There may be other issues like flooding to address as well.

The Resource Consent process for freehold titles is more involved than for a cross-lease update, and the Consent will be issued with more conditions, often including physical works in the areas described above. Once you have completed the works and gained the new titles, you will never need to complete the process again, and it may open up more opportunities to develop your property in the future.

Please contact us for advice, costings and time frames. We are here to help.