What’s the difference between a cross lease and a freehold property?
A cross lease property and a freehold property differ significantly in terms of ownership structure, rights, and legal implications. Here’s how they differ:
Cross Lease: Properties typically share driveways and water services as all homes sit on one piece of land. Making structural changes to a property (eg: adding an extension), may require the consent of the other cross lease property owners. There might also be restrictions on what can be done to the property.
Freehold: The owner has complete and exclusive ownership of both the land and any buildings on it. This means they have full legal title and rights to use, sell, or modify the property as they see fit without any shared ownership.
Can you convert to a freehold?
Yes you can. It involves a simple subdivision.
The conversion requires:
- A survey of the property to highlight the new property boundaries.
- A survey of where the power/water services are located and how they can be separated.
- A subdivision consent application prepared and lodged.
- Physical works to separate the services and potentially upgrade the driveway.
- An application to Land Information New Zealand for the new property titles.
When it comes to selling your property
Cross-Lease Property: Buyers need to understand the terms of the cross-lease agreement. Financing options can be more limited due to the leasehold nature of the ownership.
Freehold Property: Selling and financing a freehold property is generally more straightforward, as it involves the transfer of a freehold title. Buyers have clear ownership rights, and financing options are typically more accessible.
Contact our expert team today so we can help you get the process started!