crosslease -> freehold

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tcpdump

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#72460 26-Nov-2010 14:27

Hi,

I have recently bought a house on a cross-lease subdivision. In theory (on plans) it shares the drive way with the other house but in real life it doesn't as it has a garage and the drive way is used by the other house.

Is it possible to change the cross-lease to a free hold title considering there are no common areas in real life? Does it make any sense except the fact that you can work on your house without asking for consent from the other lease holder (not the case in this case as the section is only about 300sqm and there can't be anything done on the house).
Is the value of the land the same if the title is a cross-lease or a free hold?

Thanks.

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#409896 26-Nov-2010 14:35

It is, but it's not cheap!!!! If you don't use the driveway or have an access way through the front house, then yeah that's fine. But if in the future someone wants to connect up to the driveway(if possible) then it'll cost a bit more to change back.

It'll first need:
- Surveyors
- Council to mark out the new division
- Lawyers for other party to fill in the contract
- Lawyers for yourself for Conveyancing
- LIM report and surveyors back after it's been completed

Not a cheap process, tbh I think the value of the land would be the same...are the houses separate or joined? If they are separate, you don't need to ask the neighbour what colour you want to paint your house. Have you got a plan of the crosslease?

My cross lease specifically states that we can do whatever we like to our house and that only the driveway is shared as there is no body corporate. If we want to do anything to the driveway or fence on the driveway however, we need permission from the other two owners of the drive.

If you need any further help, just ask, my wife is a lawyer and I also have a mate who is a legal exec who does conveyancing.

In the current properly market, I don't think cross lease vs freehold will make much difference at all...it's very stagnant and will likely remain that way for the next 5-10 years unfortunately

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NonprayingMantis

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#409897 26-Nov-2010 14:35

I believe you can convert to a freehold, provided you satisfy the access requirements, which it sounds like you do.

Like many things that involvce the council it's probably ridiculously expensive to do though.

tcpdump

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#409898 26-Nov-2010 14:37

The big question is: Will I gain anything by converting into a freehold title?

Bung

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#409899 26-Nov-2010 14:37

Just guessing but is your house so close to the drive that you have to "own" part of it to satisfy some boundary requirement?

vinnieg

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#409902 26-Nov-2010 14:40

tcpdump: The big question is: Will I gain anything by converting into a freehold title?

How much roughly is it worth now if you don't mind me asking?

You'll spend between 5-10k converting it to a freehold title. To some people Freehold matters, to others it doesn't. If you are thinking of selling soon, don't convert it. If you are thinking of holding onto it and riding out the property decline, then convert it :)

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tcpdump

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Ultimate Geek
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#409903 26-Nov-2010 14:40

Bung: Just guessing but is your house so close to the drive that you have to "own" part of it to satisfy some boundary requirement?

I don't believe so. I think it was a big section that was divided in half. Well, in three to be perfectly correct.

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Jaxson

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#409904 26-Nov-2010 14:45

Bung: Just guessing but is your house so close to the drive that you have to "own" part of it to satisfy some boundary requirement?

As above, are the two or three sections big enough to satisfy council requirements to exist on their own?

tcpdump

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#409905 26-Nov-2010 14:46

Possibly no, they are around 300sqm each. The location is Grey Lynn, Auckland

vinnieg

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#409911 26-Nov-2010 14:57

Hmmm, might be best to ask your lawyer, since each council sort of differs for the cost of converting it. I'm guess you could technically ask your neighbours to pay half since you are both converting into Freehold?

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tcpdump

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#409912 26-Nov-2010 14:58

But at the end of the day, is it worth it? (the hassle and the money)

muppet

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#409913 26-Nov-2010 14:59

I think you'll gain something from converting it to freehold and that is more potential buyers and a higher market value. We'd often see a nice big house, well maintained etc and it was priced below where we thought it would be. We'd ask why and the answer would be "it's a crosslease"

We looked at a number of properties when we were house hunting and as soon as we heard "cross lease" we'd pretty much mark it a no.

I'm not trying to suggest that there's anything wrong with a Cross Lease. We just wanted the freedom that comes with a freehold. I think that's worthwhile to a lot of buyers, I know we weren't the only ones that had the same approach.

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chiefie

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#409922 26-Nov-2010 15:16

Not only that. Most cross-lease also share main water inlet pipe, however the sewage outlet and wastewater outlet should be separate - but depends on how it was first built.

As mentioned earlier, if you intend to stay on the property, it "may" worth to convert to freehold (or sub-section)... however it isn't cheap (price varies between each council).

Best check with your local government building/resource consent people and/or lawyer.

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wellygary

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#409925 26-Nov-2010 15:25

tcpdump: Possibly no, they are around 300sqm each. The location is Grey Lynn, Auckland

Which is likely the reason it was done that way, If you are subdividing a section to build units on, if you can satisfy the requirements of individual titles, developers will 9 times out of 10 do so, as it usually means a quicker and easier sale.

The fact yours are cross leased tend to indicate they don't satisfy the councils minimum rules on individual sections, (or would require significant legal work to do so)

tcpdump

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#409931 26-Nov-2010 15:30

Excellent. Thanks all for your answers, really appreciated.

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#409935 26-Nov-2010 15:34

Yes of course. Expect to donate 10-25 grand

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