cross lease - no exclusive use on title

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marej

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#222472 13-Aug-2017 15:50

Property I am looking is on a cross lease - 1 of 2. The 2nd flat which I am looking at has no exclusive area, but the 1st flat does. What are the potential pitfalls - has anyone been in the situation?

mattwnz

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#1845916 13-Aug-2017 16:32

Anything like that you are best to talk to a lawyer. They will likely go through it anyway without you asking. Also you could try the property talk website, as they have a lot of knowledgable and helpful people on this type of topic.

antoniosk

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#1845921 13-Aug-2017 16:54

Cross-leases were created before the rules on subdivision came into effect, and I didn't think you were allowed to define exclusive use areas.

Sounds odd, and would definetly speak to a lawyer.

________

Antoniosk

fated

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#1845931 13-Aug-2017 17:48

Not quite.

Cross leases have been used for some time and can still be used in some circumstances where a property is too small to subdivide I believe

The have been superceded mainly by the Unit Titles Act which allowed for individual freehold title and also common areas but set a better method, the Body Corporate, to deal with issues between owners and joint maintenance responsibilities.

A cross lease allows exclusive use of some areas (usually the area the house or unit occupies and sometimes access to it) but common ownership of the rest of the non-exclusive property. The downside is anything that is done on any part of the property must, in theory, be agreed to by the other parties to the cross lease.

They are not inherently bad but you need to go into them with your eyes open.

Get proper legal advice.

mattwnz

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#1845938 13-Aug-2017 18:12

fated:

Not quite.

Cross leases have been used for some time and can still be used in some circumstances where a property is too small to subdivide I believe

Do they also have to pay infrastructure costs when a new houses is built on a cross leased piece of land? I am somewhat surprised that councils allow them, because there is a reason why councils only allow sections of a certain size.

richms

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#1845982 13-Aug-2017 19:23

Yes there are costs. They were done when there was things like a shared space with a garage in it and similar which would prevent there from being 2 sepearate titles for 2 totally different houses quite a bit in the 90s.

Richard rich.ms

Aredwood

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#1845992 13-Aug-2017 19:42

Since no exclusive area for the 2nd flat, the owners of the first flat have full rights to use all outdoor areas, just as much as you are. It also means that if they take up all of the outdoor parking you can't do anything about it.

I guess you have already read the full terms of that particular cross lease? As some don't allow pets, and some don't allow you to rent out the house. Depending on your point of view, those terms might be really good, or really bad if they are there.

And check if there is a clause that requires you to always have full replacement insurance. Could be difficult to comply with that clause if the property is in an earthquake risk zone.