Many properties in New Zealand are cross leased, but a lot of people don’t know what this means or what obligations it places on owners.
What is a cross lease?
Cross lease is a form of property ownership where multiple individuals own an undivided share of land, which they build on, with the land being leased from the other owners (often for a term of 999 years). This could involve a single site with two or more dwellings, you may own the rear dwelling, have exclusive use areas at the rear of the site and share common areas such as site access. Cross leased sites also often contain flats or townhouses.
There are many cross-leased properties throughout Auckland, however this form of property ownership is now not commonly created. Often this is because a fee simple ownership structure is more straight forward in the long term- you don’t need approval of other owners and you usually don’t need to update the title plans.
What’s a Flats Plan?
The Flats Plan is a plan which is read in conjunction with the Record of Title for a property and illustrates the outline of buildings on a site, allocates the building a flat number, and identifies exclusive use areas related to each flat and common areas such as access.
Proposed additions and alterations which extend the building footprint, or new buildings (such as a garage or sleepout) need to be shown on the cross-lease Flats Plan. This means that the Flats Plan needs to be updated to reflect the changes you make. In addition, written approval will be required from the other cross-lease owners as part of the cross-lease agreement. This is a civil matter between you and the other cross lease owners, so you need to comply with this irrespective of any Council requirements.
In some cases, the Flats Plan does not match the buildings and structures on the site. This could mean that work has occurred on site without resource consent or building consent, or these consents could have been obtained but the Flats Plan was never updated. This means the title is “defective”. Having a defective title can impact on sale price, and future owners’ ability to get bank finance. You should make sure the Flats Plan is updated at the same time as you do the work or at the very least well before you want to sell it. Updating the Flats Plan is not a fast process, and if you leave it to sale time it can have a big impact on Sale and Purchase Agreements.
How do you update the Flats Plan?
Updating the cross-lease Flats Plan requires updated survey plans and a resource consent approval. It will require at least the following steps:
The site needs to be re-surveyed to confirm the location and area of buildings, including additions providing an up-to-date topographical survey.
A new plan will then be required that shows Flat areas, exclusive use areas, common areas and easements.
In Auckland, a resource consent is required to update a Flats Plan/ cross lease. Your resource consent application would detail the additions and alterations, accessory buildings etc, show how these met the applicable zone or district- wide rules in the Auckland Unitary Plan (in an Assessment of Environmental Effects report) and provide the updated plan.
Once a resource consent application is approved, a full land transfer survey and final plan is submitted to council for approval and any resource consent conditions must be met.
The approved plan is then submitted to Land Information New Zealand (LINZ), along with approval from the other cross lease owners, and the Flats Plan is formally updated.
This all takes time, and we highly recommend making the updates required at the same time as you do the physical work.
Need more advice on your property?
If you are undertaking additions or alterations on your cross-lease property, of if you have discovered your cross-lease Flats Plan is not up to date, don’t hesitate to get in touch with us at Planning Plus. Planning Plus can assist with the process of updating your cross-lease Flats Plan and preparation of the resource consent application. You can contact us on firstname.lastname@example.org or (09) 427 9966.
We also have a lot of other blogs on our website that can help you with your resource consent journey, including others in this current blog series on subdivision.
As with all our blogs this information is preliminary in nature only and correct at the time of writing. It is not intended to substitute for your own investigations or obtaining specific advice on your proposal from professionals. Planning Plus LtdTM is not liable in any way for any errors or omissions.