By Jeff Irving | Nov 10, 2020
What is a Cross-lease title?
Cross-lease is a form of subdivision dating back to the 1960’s and was common up until the mid 1990s. It was popular as it was viewed as a simpler and cheaper alternative to freehold subdivision and it got around the subdivision rules in the District Scheme (pre Resource Management Act) because it wasn’t defined as a subdivision until the Resource Management Act in 1991.
The nature of a cross-lease subdivision is where a number of people own shares in a single piece of land and have leases with the other owners to allow them to occupy and use certain portions of the land. These leases refer to a plan of the buildings and land which is commonly called a Flat Plan. The resulting title is referred to as leasehold and usually had a term of 999 years.
The flat plans vary in how they depict the buildings and land. Generally they will show the outline of the building and the extent of any exclusive use and common land.
What are the issues?
The Flat Plan shows the outline of a building at a moment in time. If the exterior of the building is altered and the plan is not updated, then the title is considered to be defective and needs to be rectified. Common alterations that trigger a defective title are conservatories, garages, fencing, large areas of decking / pergolas and more recently, post-earthquake rebuilds.
The process of rectifying the title involves a new subdivision consent from council, a new flat plan and new legal registrations. Combined costs can regularly reach up to $10,000. Commonly, a purchaser of a property will require this to be done before they will confirm the sale.
What can I do?
There are 3 options if you have a defective title:
- Do nothing and negotiate a reduction in the purchase price if the property is for sale. This doesn’t address the issues and just defers it to a future time.
- Rectify the title. This requires subdivision consent from Council and updates the cross-lease title and plan. Any future alteration will cause the title to become defective again and hence it will need to be rectified again at additional cost.
- Convert to freehold. This also requires a subdivision consent from Council, and a new legal survey, but it converts the titles from cross-lease to freehold. All the cross-lease titles on the site must be converted so the costs can be shared amongst the landowners by negotiation. While costs vary, the typical range is between $15,000 & $20,000. There is often an increase in the perceived value of the property as a result.
Articles you might be interested in
- But that’s the way we have always done it!
- Time matters – With Resource Consent
- The importance of knowing your boundaries
- Rural Allotment Sizes set to Double
- The Role of Planning in the Climate Change - Discussion for Agriculture
- Good District Plan provisions save time and money
- A Practical Guide for District Plan Reviews
- Rivers, Lakes and Coastline, Public Space for All
- Time's up on the RMA
- Selwyn District Council Changes Urban Allotment Sizes
- How Tree Canopies Transform Neighbourhoods and Enhance Lives
- Buildings under exemptions may still need resource consent
- Changes to Resource Management Planning Signalled in Proposed Legislation
- Minimum car parking requirements to be chopped
- Wild Weather and Resource Consent Requirements
- Housing Intensification – Not for Everyone Says CCC
- How might Development Contributions affect you?
- Game changers for housing under the RMA
- Rural allotment sizes set to double in West Selwyn
- New Indigenous Biodiversity Legislation Mandates Significant Natural Area Identification
- Planning Permissions – Resource Consent or Plan Change?
- Flood Management | Changes in Selwyn
- Risks to farmland in the planning framework
- Outstanding Natural Features and Landscapes - effect on farming
- Spotlight on District Plan Provisions
- Boundary disputes – What are they and how can you resolve them?
- Housing Growth continues in Selwyn with Legislative Support
- How to navigate Rural Land Development Under the National Policy Statement on Highly Productive Soils
- State highways, noise and reverse sensitivity: what’s the buzz?
- Indigenous Biodiversity: what does it mean for a farmer?
- Proposed Selwyn District Plan Update
- Burning crop stubble on your property?
- Change isn't coming, it's here!
- Make Your Additional Land Profitable Under the Selwyn Proposed Plan
- Proposed Selwyn District Plan - What next?
- Managing Wastewater in Rural Canterbury: A Guide for Property Owners
- Have your say on Development Projects
- RMA changes are coming, are you ready?
- With increasing density, good design matters
- Who Shapes our Planning Rules?
- The National Policy Statement for Natural Hazard Decision-Making and its effects on Resource Consents
- Who Pays for Infrastructure in Greenfield Land Development?
- Crunch Time For New Freshwater Legislation
- Why we have complicated septic tank disposal rules
- Highly Productive Soils – Big Picture Thinking vs Private Landowners Needs
- Fundamental Culture Shift in New Zealand Planning Legislation.
- District Plan in Selwyn – How will it Affect You?
- Our History - How We All Play a Part in its Protection
- A recent Baseline Group project was recognised at the 2022 Canterbury Architecture Awards
- What does The Selwyn District Plan (appeals version) mean for the planning process and consent?
- Is it a Wetland or Not?
- Managing Cultural Heritage Sites
- What to do when you inherit land
- Historic Heritage Challenges for Landowners
- Planning Rules can Affect Property Value
- Negotiating with Neighbours Under the RMA
- Crime Prevention Through Environment Design (CPTED)
- What does a professional planner do?
- The dream of subdividing your land
- Commercial Activity in a Rural Zone – What’s the Harm?
- Confused by Environmental Legislation? You are Not Alone.
- The rise or fall of rural lifestyle blocks in the Selwyn District?
- The impact of consent notices when purchasing land
- The Great Forestry Debate
- Your Rights as an Affected Neighbour: Navigating Development Under the RMA
- Tiny Home Revolution May Not Save Costs
- Highly Productive Soils – Big Picture Thinking vs Private Landowners Needs
- How lizards might affect your new development
- Is the RMA really the problem?
- Planning land use to be resilient to natural hazards
- Importance of Sediment Management in Land Development Projects: Simple Techniques for Effective Sediment Runoff Control
- Navigating New Opportunities: The Importance of Land Development Planning in 2024
- Minimum Car Parking Requirements to be Chopped
- Hazardous activities, land contamination and resource consent applications
- Balancing Common Sense and Legal Process under the RMA: Protecting Communities and the Environment
- Councils are Increasing Residential Density, but why, who does it benefit?