Understanding Cross Lease Properties: Pros and Cons

Cross lease properties are actually rather common in New Zealand, but they’re often misunderstood by the average person. What are they? What are their pros and cons? If you wish to purchase a property of this kind, what should you know?

Furthermore, if you already have a part of one of these properties and are unhappy with your current situation, is there anything that you can do? Let’s review what these properties are, their pros and cons and who to talk to if you’d like to make a change. 

What Exactly Is A Cross Lease Property?

These properties are essentially properties that have shared ownership. Everyone who lives on the property, even if they live in their own homes or on their own units of land, shares ownership of the entire lot. You will have exclusive areas for just you and your family, such as your home, but you’ll also have common shared areas like gardens or driveways. 

This is opposed to other kinds of property titles, like fee simple titles, where you would fully own the property yourself. 

What Are The Pros Of Cross Lease Properties?

Every kind of land ownership has its pros; what are the advantages of these properties?

Affordability. These kinds of lots are generally more affordable when compared to other types of property ownership. So, they could be a cost-effective way for new landowners to purchase property and own the land they live on. While you wouldn’t fully own it yourself, you’ll still own a part while staying within your budget. 

Shared Maintenance Costs. You and your fellow owners will share the responsibility of maintaining common areas, lightening the burden on your shoulders. So, it’ll be easier and cheaper to keep shared areas clean and beautiful for everyone to enjoy. 

It’s best to discuss maintenance requirements with other leaseholders so that everyone stays on the same page. 

Community Living. If you’re someone who enjoys interacting with others, then living with neighbours who you often talk to and work with can be a highlight.

The Cons Of Cross Lease Properties

What are the downsides of these properties? Unfortunately, many property owners find that these cons outweigh the above-listed pros:

Restrictions On Modifications. One of the main disadvantages of these properties is that you have limitations on what you can do, even if it’s to your own home. If you wish to modify your home or your section, then you’ll need express permission from all other leaseholders before you do so. This can make renovating your home a hassle, regardless of whether you want to make a significant change to your home or you simply want to make a small addition to your land. 

Disputes With Neighbours. Unfortunately, sometimes it can be difficult to get along with others – and this can be amplified if you’re both shared leaseholders who live next to one another. Shared ownership can lead to conflicts, especially regarding the use of common areas or disagreements over property changes. 

Resale Complications. Because shared ownership is more complicated than sole ownership, potential buyers may not be so interested in purchasing your share if you want to sell. Selling your share of your NZ property can be frustrating and difficult, and you may not get the value you hope for. 

Can You Convert A Cross Lease Property To A Fee Simple Title?

If the disadvantages of these properties are too much for you, then you may be wondering what to do. Luckily, the answer is very straightforward – you can convert your property to a fee simple title.    

This can be done by working with professional land surveyors who have experience with property conversions. The process can be very complicated, so hiring experts who understand New Zealand’s property regulations can be a significant help.

The conversion process will involve getting permission from the other leaseholders and working out a deal that everyone’s happy with. Then, your surveyors will work hard to handle the necessary approvals to ensure legal compliance. Once the process is complete, you can forget about the disadvantages of cross lease properties and enjoy all of the benefits of full ownership. 

Is Converting Your Property The Right Choice For You?

If you’re unsure whether to convert your property, you can speak to your professional surveyors to ask about your opportunities. They can walk you through the process, discuss your goals and explain what you’ll need to do to successfully convert your property. 

Then, you can make an informed decision for your future. 

Starting Your Pathway To Sole Ownership

Are you interested in converting your property? Or would you like to speak to a professional to learn more about what you can do? Just speak to us at Fluker Surveying, and we’ll help you out. We’re proud to offer our clients a variety of surveying services, including help with cross lease conversions and subdivisions.

We understand that property matters can be confusing and stressful, so we’re here to discuss your options with you if you’d like assistance. Contact our Fluker Surveying team through our contact page or reach us on 09 427 0003 to get the conversation started.

Fluker Surveying: Get the information you need and work with professionals you trust.