Cross Leases - What you Need to Know

Cross Leases – What are they?

A cross-lease title means that you and the other flat owners jointly own all the land on which all the flats are built.  Each flat owner then has a lease giving it the exclusive right to occupy its own flat and surrounding land.

What is contained in the Lease?

The memorandum of lease will usually include details such as:

• exclusive use areas that your flat may have;

• maintenance and use of common areas;

• how costs are apportioned for any work or repairs required;  

• whether or not pets are permitted;

• what happens if you need to make structural alterations to your flat;  

• insurance; and   

• the condition the flat must be kept in.

Leases are tailored to each cross-lease property. If you are uncertain as to what is contained in your lease, you should seek legal advice.

Can I make Alterations to my Flat?

If you intend to complete any alterations to your flat, or want to build on your restricted use area, this can be more difficult and expensive because you will need the consent of the other flat owner(s). A new flat plan and title may be required depending on the alterations or additions to the flat.

If you do intend to carry out any such work in the future, be mindful that this is likely to be costly and it is important to take survey and legal advice before proceeding.

Insurance

When arranging insurance for your flat, it is recommended that you use the same insurer as the other flat owner(s). This is to avoid the problems that could arise with differences in insurance policies, particularly if improvements (such as driveways) on common property are damaged.

Issues with Cross Leases Today

Common issues arising from cross-lease ownership that we are seeing today includes:

• The flat plan not representing the true outline of the flat, and any additional buildings or structures, for example a garage.

• A conservatory being built on the exclusive use area of the flat, is attached and enclosed however is not shown on the flat plan.

• Consent from neighbours to complete any structural alterations to that flat.

• The flat plan not being updated to reflect that the existing flat has been demolished, and a new flat erected. This is particularly common where cross lease properties have been rebuilt after the Canterbury earthquakes, and the flat plan has not been updated to reflect the new building.

Given the above issues, property owners today are seeking legal advice around converting their cross lease into a freehold title.

Issues arising from cross leases and not complying with the terms of the lease are becoming a more prominent issue for those buying and selling today. Our property team at Saunders Robinson Brown are experienced in dealing with a wide range of issues arising from cross leases and are able to advise you on the implications and options. Contact us today if you have any questions.

Disclaimer

The above information is of a general nature only.  The information in this article does in no way constitute legal advice and all readers should contact a law firm for advice relating to their specific circumstances.