Cross-lease property developments were prolific prior to the introduction of the Resource Management Act in 1991 as they did not need to comply with subdivision regulations or reserve contributions. However, the RMA changed all of that and what is left is a more restricted form of property ownership where you own an equal share in the underlying land with a lease agreement on the house and private areas. The main disadvantage is that any alteration to the house or permanent structures require the consent of your neighbours, an application to Council, and an updated certificate of title. It is often beneficial to convert your Cross-Lease property into a Fee Simple Title for a number of reasons; to obtain a simpler title for your property, gain exclusive ownership and possession of the land and buildings you own, make more alterations to the exterior of your home without your neighbours’ consent and increase the value of your home.
Myall & Co regularly undertake Cross-lease to Fee-simple conversions and are experts in rectifying defective titles. We can step you through the process and outline any specific site requirements for your property. The property below is a typical example of a cross-lease to fee simple conversion. Our client had a defective title due to a historical building extension that was not updated onto their certificate of title and prevented them from selling their property. Instead of updating the title and ‘flats plan’ we advised them to undertake a cross-lease to fee-simple subdivision. The end result was a separate fee simple title for both properties.