Navigating Cross Leases In Auckland: Pros, Cons And What You Need To Know
Cross leases are a unique property ownership type that is common in Auckland. In a cross lease arrangement, each property owner owns their own home or building, but they all have shared ownership of the lot of land their homes are on. This arrangement has many advantages, but it can make certain things a bit more difficult. For instance, changing your cross lease to a freehold property may seem challenging if all owners disagree about what to do.
What Are The Pros And Cons Of Cross Leases?
Cross lease properties have many advantages, which is why they remain popular and prevalent in Auckland and the rest of New Zealand. These benefits include:
- Affordability. Cross lease properties are often more affordable than freehold properties, making them a good option for first-time buyers or people on a budget. However, it is important to note that cross lease properties can still be expensive, and the prices you deal with will depend on various factors.
- Community Spirit. Cross lease properties often have a strong sense of community, as property owners need to work together to maintain the common areas. This can lead to a more supportive and friendly neighbourhood. While some decisions may be difficult, like a change from a cross lease title to a freehold one, others can benefit everyone on the property. Carrying out work, improving common areas and renovating spaces can improve the entire property. This camaraderie can help everyone in the neighbourhood build a rapport and create lasting relationships.
Along with these advantages, there are also some disadvantages that you should be aware of. You may want to consider changing from a cross lease to a freehold if any of these disadvantages are a dealbreaker for you. These cons include:
- Complexity. Due to the fact that there are multiple property owners, cross lease arrangements can be complex and difficult to understand. This can lead to disputes between property owners who don’t agree about their responsibilities or their rights. So, it’s important to carefully review the agreement before buying a cross lease property. Always make sure you fully understand what you're responsible for before you sign any contracts. This will help you avoid disagreements and disputes in the future.
- Lack Of Control. Property owners in a cross lease arrangement have less control over their property than freehold property owners. This is because they need to share common areas with their neighbours, and they may need to get permission from other owners before they make certain changes. This is one of the main reasons why cross lease property owners consider changing their cross leases to freehold titles. While you can generally make interior changes to your home, exterior changes may be restricted unless every property owner agrees.
If you are considering buying a cross lease property in Auckland, it is important to carefully weigh the pros and cons. It is also important to understand the cross lease agreement and the responsibilities of each property owner.
These tips can help you if you purchase or are considering a cross lease property:
- Be Respectful. It’s always essential to be respectful of your property owners and their properties, even if you have disagreements or don’t know each other very well. This means being mindful of noise levels, parking situations and other potential nuisances that could affect them. It also means being willing to compromise and work together to resolve any disagreements that may arise.
- Be Proactive. It would be best if you also were proactive when managing your property. This means being aware of your rights and responsibilities and being willing to take action to ensure that the common areas are well-maintained for the benefit of everyone.
- Seek Professional advice. If you have any questions about your cross leases in Auckland, or if you are considering changing your cross leases into a freehold, you should always get professional help so that you understand what you can and can’t do.
Can I Convert A Cross Lease Into A Freehold Property?
Freehold properties, which are also known as ‘fee simple properties,’ are properties where the property owner owns the land. They also typically own everything built on the land, except in special circumstances. Freehold properties will give you far more control over what you can do with your land and buildings.
Luckily, it is possible to change a cross lease property into a freehold property. It’s best to work with a professional when considering this change to make sure everyone is happy with the results, including other property owners.
Where Can I Get Professional Assistance Regarding My Properties?
If you’re interested in turning a cross lease property into a freehold property, then we at Civix are here for you. We’re proud to offer you a variety of helpful services, including cross lease conversions, updating flat plans and even lawyer services.
Would you like to know more? Call us on 09 303 1113 to speak to our team.
Do what’s best for you - work with Civix when converting your cross lease property.