While cross-leases are a common form of property ownership, they do bring with them restrictions on what owners can or cannot do with their property.  This is often relevant when an owner wishes to carry out alterations such as extending their dwelling or erecting a garage. Because of this, cross-lease titles are generally viewed as a less attractive option to fee simple titles, and therefore, the less valuable title.

However, it is possible to convert a cross-lease title to a fee simple. While this involves cost, in many cases this can be a viable option worth exploring.

The Benefits of Fee Simple Ownership

Unlike cross-lease titles, where you share ownership of the underlying land with your neighbours, fee simple ownership grants you exclusive rights to the land and any buildings on it, both above and below ground.  This is subject to certain legal restrictions such as the District Plan, building legislation, and easements and land covenants (if applicable)

This means you can make alterations to your dwelling without needing neighbour's consent.

Fee simple ownership is often seen as a way to increase the value of your property, making it a more attractive investment.  We recommend you discuss with a Real Estate Agent or valuer.

The Conversion Process

Converting a cross-lease to fee simple constitutes a subdivision.  However, unlike most subdivisions, most if not all required infrastructure is often already in place, reducing costs.  In addition, no development contributions to the local authority should be payable for a straightforward conversion.

Several steps are involved.  You will need to obtain the consent of your neighbours, as they need to be involved in the process.  They may be prepared to share cross lease costs with you. You will need to apply for a subdivision consent from the local authority, so planning advice should also be sought early on.  A surveyor will need to draw up scheme and survey plans, including any proposed easement areas for services and shared legal access if required.

The existing cross-leases must be surrendered to allow fee simple titles to issue. This process requires careful coordination and the expertise of professionals such as surveyors and your solicitor.  Both you and your neighbours will need to sign documentation with your lawyers as part of this process and if you have a mortgage, your bank will also be involved in the process.

Financial Considerations

Costs may include local planning and surveying fees, legal fees, consent costs payable to the local authority and Land Information New Zealand Fees.  However, the long-term benefits of fee simple ownership, can make this a worthwhile investment.  It is advisable to consult with professionals early to obtain a clear understanding of the costs and to navigate the process efficiently.

Conclusion

By taking control of your property and eliminating the restrictions of a cross-lease, you can enjoy greater freedom and potentially increase your property's market value.

For more information on how to convert your cross-lease to fee simple ownership, or to discuss your specific situation, please contact Chris Egden, Principal ([email protected]/03 343 8584). Our team of experienced solicitors is here to assist you in unlocking the full potential of your property.