Convert Cross Lease to Freehold in Auckland
As subdivision professionals, we are often asked about crosslease conversion. While this is not a service we provide, we have provided a handy outline of the process below.
Benefits of Converting your cross lease property to freehold
Here, we give Aucklanders the information on how to change their cross lease properties to freehold, fee-simple titles. A freehold title not only allows for greater flexibility, but also can dramatically improve the resale value of your Auckland property.
Increase the resale value and saleability of your property
Gain the freedom to make renovations & additions to your home
Obtain Absolute ownership of your land
Cross Lease to Freehold Process
To change your Auckland cross lease title to a freehold, fee-simple title, the property must be subdivided. Each of the owners of the cross lease title will need to agree to the cross lease to freehold conversion. Ensure you have discussed this with all parties on your cross lease agreement.
1. Prepare subdivision application
The first step is collating all the relevant reports and documents for your application. This involves enlisting a Surveyor to provide a drainage report, topographical survey, and draft subdivision plan.
2. Submit application to council
Submit your subdivision application to the Auckland council. The council must determine that the subdivision layout and provisions provided are correct and that all conditions of the consent have been (or will be) met.
3. Council approval confirmation
The council will approve your application. They may outline some conditions that apply to your cross lease conversion (for example, improving drainage).
4. RMA and LINZ Application
Prepare Land Transfer survey plan and peg the new boundaries of each property. Application is made to LINZ for approval as to survey. Application for s.223 and s.224c certificates made to council.
5. Conveyancing documents & new titles
Execute conveyancing documents executed - AML, legal waivers, and mortgagee consents. Collate all final documents and make application to LINZ for the new titles for each property.
6. Cross lease to freehold conversion complete
New fee simple titles issued and your cross lease to freehold conversion is complete!
The History of Cross Leases in Auckland
In the late 1960's, cross leases were introduced to bypass restricting subdivision conditions and to save property developers costs and time. However, the introduction of the Resource Management Act 1991 and the Auckland Unitary Plan has essentially made cross lease arrangements obsolete. However, the historical issues associated with existing cross leases are a continued source frustration for many Auckland property owners.
Differences between a cross lease and a fee simple (freehold) title:
Fee Simple
A fee simple property is one that grants its owner full rights over both the land and the dwelling atop it. So if you own a fee simple property, you can alter or make additions, or even subdivide the property without needing your neighbour's consent (as long as you adhere to council regulations).
Cross Lease
Under a cross lease arrangement each property owner owns undivided shares in the underlying land while 'leasing' both the dwelling and the land that residence is on from all other owners. The duration of the actual lease is usually set at 999 years. Additions to the property will require consent from all parties listed on the cross lease agreement.