Cross-lease titles were all the rage from the late 1950s – 1980’s, but as times change, so do buyer preferences. As more and more homeowners choose to convert their cross-lease titles to fee simple, we’ve decided to put together a quick guide to help you understand the process.
The basics: cross-lease vs. fee simple
Cross-lease titles date back to the 1950s, when they were often used as a ‘non-subdivision’ way to create multiple titles for one piece of land. In a cross-lease, multiple people own the land, and lease parts of it to each other to build on, hence the term “cross-lease”
In practice, this means that any alterations to your dwelling or outbuildings need the consent of the other owners - so if you own a cross-lease property and want to add a garage, conservatory or deck onto your house, you’ll need your neighbours’ approval. With a fee simple title, you own the land and you can do what you like with it - without your neighbour’s consent - as long as you meet the relevant local planning guidelines.
Why would I want to convert my cross-lease?
There are a few common (and sensible) reasons to convert a cross-lease property:
- Maximise your market value
Fee simple titles are easier to market and sell, as buyers taking on a cross-lease property are generally aware that they’re also partially taking on the neighbours property - and the potential for future disputes.
- Full control over your property
Renovate, alter, and improve your property, without having to gain consent from your neighbours.
- Defective title
If the buildings on your property don’t match the latest Flats Plan (the legal outline of each property that form part of the title) on the cross-lease title, your title is defective and will need to be rectified - either by updating the cross-lease title itself, or by converting to fee simple.
Now that you know the basics, let’s get into the cross-lease process.
How do I convert a cross-lease?
Good news - the Survus team have done plenty of cross-lease conversions in Christchurch, (and elsewhere in Canterbury) so we’ve got the experience and expertise to help make the process simple & stress-free for you.
First things first: ensure that all of the owners on the cross-lease are on board. Even if one owner pays the total cost of the conversion, all of the owners need to sign the paperwork. The cost is often split evenly between the owners, as everyone benefits from converting to fee simple titles. As a rough indication, costs are usually between $23,000 - $25,000 for a two - unit lot cross-lease conversion. The total cost increases slightly as you get more units, but economies of scale apply as this can be spread across more additional owners.
Our outline of fees includes the surveying costs, as well as an idea of the legal costs, Council costs, and Land Information New Zealand (LINZ) fees. The only thing we don't cover is any potential engineering work, this would be quite rare however, as very little changes physically on site.
Converting a cross-lease is considered technically a form of subdivision, so allow around 5 months for Survus to complete the process. To satisfy subdivision consent requirements, each property will require separately metered water, but this is likely the only physical condition the CCC will require.
Eight (Fee) Simple Steps
The following timeline gives you an indication of the process involved in changing from cross lease to free-hold
One of our awesome surveyors will undertake the initial measure up the site survey, take levels if required, and prepare your scheme plan.
Remember that scheme plan we just prepared? We’ll send that to you to confirm as correct. At this point, it would be prudent to get confirmation from all parties & your lawyer. This will allow them to get started on the easements & legal documentation.
Once everyone is happy, we prepare and submit the subdivision application to Council, and wait for them to issue a subdivision approval. Under RMA regulations, they have 20 working days to issue this, and once we receive it, and check the conditions, we will let you know we are now ready to start the next stage
Our team spends some time in the office undertaking the pre-calculations, then heads to your property, placing pegs and then starts preparing the eSurvey dataset.
Next, we complete your eSurvey plan in Landonline, New Zealand’s web-based transaction centre
The plan goes through our internal QA process, and once all required easements have been confirmed, we’ll request the Sec 223 Certificate. This confirms that the eSurvey plan matches the scheme plan the CCC approved. (checks & balances!)
Almost there! We now lodge the plan with our pals at LINZ, and request your Sec 224 Completion Certificate from Council. Once the Sec 224 Cert is issued, and LINZ have approved our dataset, we send these to your lawyer, and that is the end of our surveying work; (we release our surveyor to go and have a well-deserved cup of tea.)
Your lawyer gets consent for the change from your mortgagee, and sits down with you and your neighbours to sign the new paperwork. Once that’s done, the lawyer requests the new titles from LINZ - and as soon as they’re issued, you’re the proud owner of a fee simple property!
Seems pretty straightforward, right?
If you’re sitting on a cross-lease title and you think your neighbours would be open to sharing the benefits of converting to fee simple, get in touch. We can answer any questions, and get you started on the process of converting a cross-lease title in Christchurch, or anywhere else in Canterbury for that matter.