Good +Title is a company that facilitates the transfer of property from cross lease to fee simple title. We asked principal Karen Overend to tell us more about what the company does, and why it matters...
Channel Magazine: What is the difference between cross lease and fee simple? What kinds of properties are likely to be on cross lease titles?
Karen Overend: Fee simple is what people think of as a freehold title – you own the land totally and (subject to planning restrictions) can do what you like on it without needing your neighbour’s permission.
Cross lease titles were invented in the early 1960s to get around subdivision rules. The neighbours jointly own all the land, but lease the buildings to each other. The North Shore has a very high proportion of cross lease titles, which aren’t limited to townhouses or flats – they can be separate independent houses.
CM: Why should cross lease owners convert?
KO: A cross lease title simply isn’t as good a title as a fee simple title; because your neighbour is a co-owner of your land, you need your neighbour’s permission for things that a freehold (fee simple) owner wouldn’t. For example, any alterations to the property – even something as simple as changing a window to a french door – could require your neighbour’s consent. If your neighbour refuses consent, and you go ahead, you may be required to take your alterations down.
Cross lease properties are often the subject of neighbour disputes, and resolving any dispute is not easy and very expensive. There is therefore often a value discount applied to cross-lease properties – a fee simple property is frequently worth more, and is easier to sell. But there is also a greater benefit than just money: the ability to make your house the way you want, without needing your neighbour’s consent, and without the ongoing costs of needing to update the flat plan on your title after each alteration.
CM: What is the process and how long does it take?
KO: The process can be complex for people to do themselves. It involves a full subdivision consent application which needs to be approved by council, and a full survey of the property including the placement of pegs etc. that needs to be approved by LINZ. All properties on the cross-lease must be accounted for in the subdivision and all the owners are required to sign the final documents.
We usually suggest that people allow four to six months to convert from cross lease to fee simple.
CM: How can Good + Title help people convert their cross leased property to fee simple.
KO: Converting to fee simple is complex, involving planners, engineers, lawyers, surveyors, the council and neighbours. This is why we set up Good +Title, to be a ‘one stop shop’.We make everything easy and can handle the process from start to finish. We do this by being a professional joint venture between one of New Zealand’s only specialist property law firms, Overend & Associates, and the long-established innovative surveying practice Survus Consultants. We use our combined experience and expertise to efficiently handle all elements of the process, and give you an all-up fixed price for the whole process.
CM: What is it likely to cost?
KO: We are happy to undertake a no-obligation, free desktop investigation and will provide a detailed fixed price proposal outlining all the costs involved. This can depend on a number of factors, including the nature of the ownership, the layout of the property, the number of units, etc. As a ball-park figure, for a standard two-lot cross lease property, the cost to convert from cross lease to fee simple can vary from $14,000 - $18,000 per lease owner. It is important to note that this is an all-up cost – including planning and survey costs, plus legal fees, Landonline fees, and Council fees, which are considerable.
CM: Could my cross-lease title be defective?
KO: If the buildings on site do not exactly match your cross-lease plan, your title is probably defective. If this is the case then we advise that you either to rectify the cross-lease plan, or even better, convert your property to a fee simple title. Although the conversion to fee simple is more expensive, in most cases we strongly recommend converting cross-lease properties to freehold, particularly in the Auckland area, due to the often significant uplift in values.