Convert a Cross leased property to Free Simple

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zkam002

5 posts

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#160553 11-Jan-2015 19:23

We had a massive backyard when we bought this house so my dad decided to build a 3 bedroom single floor house out back. The house is under cross lease. It has it's own drainage and we both share the same driveway.

Is it complicated to convert it into a free simple title so we can sell the house? What should we do before we attempt to do this? Has anyone here gone through the same or similar process? we are just not sure where to start or how much it would all end up to.

Our house is in South Auckland (Papatoetoe)

Any input would be appreciated :)

mentalinc

3239 posts

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#1212052 11-Jan-2015 19:30

Why bother converting from cross lease to fee simple?

Will the legal and draughting fees be less than the "increase" in value of a fee simple property?

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scuwp

3885 posts

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#1212055 11-Jan-2015 19:34

My advice...go see a property lawyer.

Lazy is such an ugly word, I prefer to call it selective participation

richms

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#1212061 11-Jan-2015 19:42

Cross lease means you have to ask the other house owner inorder to do anything on your property and they can get all lawyery expensive if you do anything without going thru all the processes.

Cross lease was done when the councils made it hard to subdivide. My impression from dealing with some agents is that many buyers do not want to deal with a cross leased property because they are then at the mercy of neighbours for any improvements, not just ones that would trigger a resource concent. As the process is less formalized than a resorce concent, there is more room for it to go horribly wrong.

If less people want the house, then it is worth less. If the neighbours know you are selling they may be keen as to get it out of a cross lease since the limitations affect them as much as you, and any new owners would be able to be dicks about the smallest of things, like putting a spa pool etc in.

Richard rich.ms

antoniosk

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#1212076 11-Jan-2015 20:02

Agree with rich ms

It's an old legal trick that got around some of the sillier laws in the 70s and 80s. Undo it while you can and have everyone's cooperation.

You'll need to get agreement on how to divide the 2 properties with boundaries etc - and the final outcome WILL determine valuation, so be clear on what you want. You'll need a surveyor to draw up the new boundaries - about $2k I think - and a lawyer will need to draw up paperwork for council and Linz. Expect anothe $2k there. Then about $1k in auckland council fees to setup 2 new titles etc

If memory serves.... Investigated this way back on 2006 on a khandallah property in welly.

________

Antoniosk

graemeh

2078 posts

Uber Geek

#1212202 12-Jan-2015 08:13

Are you sure it is a cross lease? It has been fashionable for quite a while to build a "minor dwelling" which has separate plumbing etc but is on the same title so can't be sold separately.

As others have said, if your place is on a cross lease you can sell it. No need to change to fee simple unless you think it would get a price high enough to justify the extra legal costs.

Don't waste your time talking to a lawyer, talk to a surveyor, they will know what you need to do to change to a fee simple title. This may include extra physical works, not just paperwork.

Aredwood

3885 posts

Uber Geek

#1212879 13-Jan-2015 01:33

Also lots of buyers don't like shared driveways. I have seen a figure claimed on trademe real estate forums that equivalent houses. Only difference being 1 is shared driveway, the other not. Difference in value approx $50K.

You have said separate drainage. But what routes do the drain pipes take? Also water, power, phone ect? As if any services for 1 property cross the land of the other then easements will need to be placed on the title. And you will also need easements for the shared driveway. So you will probably end up with a big web of easements on both titles.

And find out about development contributions. As if you have to pay them, The cost could easily get to 50K all up. Also check your address on http://unitaryplan.aucklandcouncil.govt.nz/Pages/xc.enquire.pe/pe.start.aspx?key=egTGJQpUNzJJFPTLxioO So you can see what you can do under the new plan. It may be better for you to wait for the new rules to take effect. And also check to see what the neighbours can do with their properties. You won't be happy if they build an apartment building right on your boundary.

lissie

495 posts

Ultimate Geek

#1225473 30-Jan-2015 16:37

I checked this for 2 flats that we owned that are cross-leased to each other and down a common driveway. I was told in the ballpark of $20-$25k just for the legal and surveying fees. They may be additional costs around plumbing.

I decided to leave it alone and just market them as a pair - seems to be working ...

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stevenz

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#1226126 1-Feb-2015 09:31

I've just bought a cross-leased property so I did some research into this and also had a chat with my property lawyer.

The general upshot is that unless you have a spare $20,000 laying around that you don't have any other use for, then don't bother, as it's just not worth it as in most cases it won't increase the value of the property by as much as it costs to do the conversion. Maybe if you had plans to do major alterations you'd look into it, but otherwise it's more trouble than it's worth.

However, the government is _supposedly_ looking into making the process much easier (cheaper), but when\if they ever get around to this, who knows. Even then, there will still be any number of issues due to easements & right-of-ways, drainage, etc. that'll need to be sorted out with the council.

@KnightNZ

froob

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#1226141 1-Feb-2015 10:36

I had a friend who went through this process for his place up in Auckland. The figures above are probably about right based on his experience. Essentially you have to go through the subdivision process again - including getting resource consent and putting in place easement etc for shared services and driveways. It would require cooperation from the neighbour, so it would help things along if you have a good neighbourly relationship.

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