Cross-leases are probably the most complicated form of property ownership in New Zealand and it can be hard to get your head around it. As a cross-lease holder you are a part owner of every building on the plot of land along with the other leaseholders.
Not all cross-leases are the same, so it’s important to get legal advice before purchasing a cross-lease property and if you want to do any renovations or make any changes.
Let’s stitch our way now through a scenario where a cross-lease holder wants to make some alterations to their property.
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Cross-lease holder and property owner: I own a property that’s on a cross lease title. I’m wanting to do some minor renovations to the interior of the house. This is fine, right? |
Our response:
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I just want to change some walls and doors and upgrade the electricals, kitchen and bathrooms, replace the window joinery with new aluminium windows, and soundproof and fireproof the whole flat.
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Those changes could be considered structural. Your cross lease might say you’ll need the other cross lease owners’ consent for any alterations that are considered structural. The definition of what is structural is pretty wide and would depend if it affected your neighbour’s property. |
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Wow, I didn’t realise! Do I have to get all the neighbours to consent? |
Just the other cross-lease owners. Your lease will tell you if that is all of them or just the majority. |
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I’ve already spoken to the neighbours about my initial plans and they don’t seem too happy. Do they have to give a good reason for not consenting? |
Yes. Did your neighbours say why they were unhappy about the renovations?
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Well, the house is two stories and used to be a single dwelling. The renovations I’m doing will mean it can be used as two separate units to rent out. The neighbours weren’t happy about the increased traffic up the driveway. |
That’s probably a reasonable argument for not giving consent. Have you considered the extra driveway traffic? |
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I am currently parking just outside the front door of our flat, but all the other owners have a specific carpark. I can use the driveway for parking, right? |
The driveway could be considered common property. This probably means you can’t park on it, even if it is right outside your front door.
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How annoying! I’ve already gone ahead and got council consent for all this. I thought I can do anything as long as Council says it’s okay? |
It’s not just up to the council, they won’t consider your cross-lease. These rules are just between the cross-lease owners and operate separately to council. |
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So what do I do now? |
Go back to your neighbours for their consent. If you go ahead without their consent, you could be in breach of the cross-lease and the other owners have rights if you do breach the lease. |