Converting your cross lease property to freehold

So, you want to convert your property from cross lease to freehold?

Here we unpack:

  • The conversion process
  • What you need to know about cross leases
  • Various things to be aware of along the way

Like everything we do, we want to make the cross lease conversion process easy. You’ll be working with the experts for your conversion – we have staff specialists in planning, engineering, and surveying who are the very people handling your cross lease conversion. You’re in safe hands.

What you need to know

Cross lease developments were a way to build more than one house on a single property without the cost and complexity of a full subdivision. All owners have an equal share of the value of the whole property, and certain parts of the site (usually the houses and garages) are designated for the use of one owner exclusively. Your record of title will probably refer to your house as a ‘flat’ or an ‘area’ and will describe the sharing of the land as a ‘lease’. If you want to make changes to your part of the property, you’ll often need your neighbor’s approval. For this reason, cross lease properties can be less appealing to prospective buyers.

Issues with cross lease properties

Because a cross lease property is owned jointly and all owners must agree before changes are made, it’s helpful to build a positive relationship with the other owners on your cross lease. A cross lease may also have shared driveways and shared services, so the responsibility and cost for maintaining these is also shared, no matter where on the property the maintenance is needed.

Cross lease properties can return lower value when compared with similar free hold properties due to restrictions associated with them.

The Process

  1. You discuss and agree your plans with cross lease neighbours

Because all owners of a cross lease property have a say in what happens to the property, your cross lease neighbours will need to agree to your plans to convert (subdivide) the property. You’ll also need to discuss how the costs will be shared, and it’s a good idea to have a financial agreement in writing at this point.

  1. We obtain a resource consent for the conversion

We’ll survey your property, check the property’s compliance with planning rules, and assess whether any changes to the driveway or drainage are needed to allow the conversion (subdivision) to take place. We’ll check that you’re happy with the proposed new boundaries, and then prepare a resource consent application for approval by Auckland Council.

  1. We obtain consents for any site works required

If the driveway needs to be widened or strengthened, or if you currently have shared connections for wastewater, stormwater, or water supply that need to be separated, we’ll prepare detailed plans for this work for approval by Auckland Council.

  1. You arrange works on site

Once all the consents have been obtained, the actual site work can go ahead. Our designs aim to minimise the disruption and cost of any work needed. We can recommend contractors for you to contact, or you can choose someone yourself. We can also project manage obtaining contractors and the construction works for you if you desire. Once the work is underway our engineers will carry out engineering monitoring  and arrange the necessary inspections and sign-offs.

  1. We complete the cross lease conversion

Finally, our surveyors will mark the new boundaries on site and prepare the data used by Land Information NZ to make these new boundaries official. You will then need to arrange a solicitor to apply for new records of title for the converted freehold properties.

FAQ's

A cross lease conversion is essentially a subdivision, where new boundaries are created to divide up the property into separate sections. After the conversion (subdivision) you will each own your own part of the property.

Cross lease developments were a way to build more than one house on a single property without the cost and complexity of a full subdivision. All owners have an equal share of the value of the whole property, and certain parts of the site (usually the houses and garages) are designated for the use of one owner exclusively. If you want to make changes to your part of the property, you’ll often need your neighbour’s approval. For this reason, cross lease properties can be less appealing to prospective buyers.

An easement gives someone a specific right over someone else’s property, without any shared ownership like a cross lease. It’s likely that some easements may need to be created as part of the subdivision process.

  • If you and your neighbour’s houses share a common wall, a party wall easement gives you the right to ensure that common wall is maintained and that the structure of the wall is not compromised.
  • It’s common to share all or part of a driveway or a turning area with a neighbour, and a right of way easement ensures that it’s clear which areas are shared and which are private.
  • Underground pipes that drain wastewater or stormwater may cross over the new boundary between your property and your neighbour’s property. Usually, these pipes will be owned by Auckland Council or Watercare, but if they are privately owned a drainage easement may be required to give the right to use and maintain the part of the pipe that’s on the other side of the boundary.

A record of title (often simply called a title) is the electronic record of your property ownership, the property size, and any legal restrictions or rights related to that property. Your title will also say whether it is a cross lease or freehold property (or one of the other forms of title such as a unit title). You can order a copy of your title for a small charge through Land Information NZ, or we can purchase it on your behalf.

Cross lease properties often share drainage connections – for example there may only be one wastewater connection for the whole property that all the houses share. In order to subdivide your property, you would need to ‘separate’ the wastewater, in other words a new wastewater connection will be constructed for each house on the site.

Let’s Kickstart your cross lease conversion

Book a complimentary 30 minute call with one of our specialists and we can kick start your conversion with our experienced team.