Converting a cross lease property to freehold can be a transformative step that enhances the value, marketability, and freedom of your property. However, the process can be intricate and requires careful planning and execution. This guide will provide an overview of what homeowners in New Zealand can expect during the conversion process, including timelines, necessary steps, and potential disruptions.
Initial Planning and Preparation
Understanding the Basics
Before embarking on the conversion process, it’s crucial to understand the basics of what it entails. A cross lease property involves multiple owners who share a single title, with each owning a leasehold interest in their respective dwellings. Converting to freehold means each owner will have an independent title for their property, granting them full ownership of their land and home.
Assessing Feasibility
The first step is to assess whether your property is a good candidate for conversion. This involves evaluating the layout, the number of units, and any existing restrictions or privileges. Consulting with a planner or surveyor or a property lawyer can provide clarity on the feasibility and potential challenges.
Engaging Professionals
Successful conversion requires the expertise of various professionals, including:
- Surveyor: A registered surveyor will be needed to delineate the boundaries of each property accurately.
- Solicitor: A property lawyer will handle the legal aspects, including preparing and lodging the necessary documents with Land Information New Zealand (LINZ).
- Planner: A planner will assist with obtaining the necessary resource consents and ensure compliance with local council regulations and zoning requirements.
- Civil Engineer: A civil engineer may be required to assess and design any necessary infrastructure upgrades or modifications, such as drainage, access, and utilities, to meet council standards.
Initial Costs and Budgeting
Before proceeding, it's essential to budget for the initial costs associated with the conversion. These may include:
- Surveying Fees: Approximately NZD 2,720 for a topographic survey and NZD 1,500 for a scheme plan.
- Legal Fees: Around NZD 2,000 to NZD 4,000 for conveyancing.
- Council Application Fees: Typically around NZD 4,000 for resource consent processing.
- Engineering Inspections and Reports: NZD 840 for infrastructure inspections and NZD 1,300 for a site servicing plan.
- Administration and Disbursements: Around NZD 250.
Timeline: 1-2 Months
The initial planning and preparation phase typically takes one to two months, depending on the complexity of the property and the responsiveness of the involved parties.
Surveying and Legal Documentation
Surveying the Property
The surveying process is a critical step in the conversion. A registered surveyor will visit the property to conduct a detailed survey, marking out the exact boundaries of each new freehold title. This ensures that each owner knows precisely what land is included in their title.
Survey Duration: The surveying process can take several days to a few weeks, depending on the size and complexity of the property.
Survey Costs: Survey Costs: NZD 2,720 for a topographic survey and NZD 1,500 for a scheme plan.
Obtaining Consents
Converting to freehold will always require consent from the local council. This process includes:
- Resource Consents: Required if the conversion impacts the environment or neighbouring properties.
- Subdivision Consent: Always required from the council.
Timeline: 1-2 Months
- Council Processing Fees: Typically around NZD 4,000.
Drafting Legal Documents
Once the survey is complete, the solicitor will draft the necessary legal documents. These include the new titles, deeds, and any easements or covenants that may need to be registered. The solicitor will also ensure that all documents comply with New Zealand property law and the requirements of LINZ.
Legal Costs: Around NZD 2,000 to NZD 4,000 for conveyancing.
Council Approval and Compliance
Submitting Applications
The next step involves submitting applications for the necessary consents to the local council. This can include both building and resource consents, depending on the scope of the conversion. The application process requires detailed documentation and plans, as prepared by your surveyor and solicitor.
Application Fees: Fees vary by council and the nature of the consent required. They can range from a few hundred to several thousand dollars.
Compliance with Local Regulations
Ensuring compliance with local building codes and regulations is crucial. The council will review the submitted plans to ensure they meet all necessary standards. This can include:
- Zoning Regulations: Ensuring the property complies with zoning requirements for residential areas.
- Building Standards: Ensuring any construction or alterations meet New Zealand building standards.
For cross lease conversions, it is only necessary to demonstrate that the buildings have been legally established, which can be shown through historic building permits.
Addressing Council Feedback
The council may request additional information or modifications to the plans before granting consent. Promptly addressing any feedback or requirements from the council can help avoid delays in the approval process.
Timeline: 2-3 Months The council approval and compliance phase typically takes two to three months, depending on the complexity of the application and the responsiveness of the council.
Implementing Changes and Upgrades
Utility and Infrastructure Upgrades
Converting to freehold may occasionally necessitate upgrades to utilities and infrastructure to ensure each property functions independently. This can include:
- Water and Plumbing Systems: Installing separate water meters and upgrading plumbing systems to ensure adequate supply and pressure.
- Electrical Systems: Installing separate electrical meters and upgrading wiring to meet current standards.
- Drainage and Sewage Systems: Ensuring each property has independent drainage and sewage systems.
Construction and Renovation Work
If the conversion requires any construction or renovation work, this is the stage where it will be implemented. This can include:
- Structural Modifications: Any necessary structural changes to comply with building standards.
- Interior and Exterior Upgrades: Enhancements to improve the property’s value and appeal.
Timeline: 3-6 Months The implementation phase can take between three to six months, depending on the extent of the required upgrades and construction work.
Managing Disruptions
During the implementation phase, homeowners can expect some disruptions, such as construction noise, temporary loss of utilities, and restricted access to certain areas. Clear communication with contractors and neighbours can help manage these disruptions effectively.
Finalising the Conversion
Inspection and Certification
Once all changes and upgrades are completed, the council will conduct final inspections to ensure compliance with all consents and regulations. Upon successful inspection, the council will issue the necessary certifications.
- Building Code Compliance: Ensuring all construction meets New Zealand building codes.
- Final Approval: Receiving final approval from the council to proceed with registering the new titles.
Registering New Titles
With all consents and certifications in hand, the solicitor will proceed with registering the new freehold titles with LINZ. This involves submitting all necessary documentation and paying any required fees.
Estimated Costs:
- Survey Plan Approval (S223 certificate): NZD 4,250
- Land Transfer Survey: NZD 5,750
- 224C Application Processing with Council: NZD 2,500 - NZD 3,000
- Solicitor's Fees: Around NZD 2,000 - NZD 4,000 for conveyancing
- LINZ Lodgement Fees: Approximately NZD 2,000
Timeline: 1-2 Months The finalising phase typically takes one to two months, depending on the efficiency of the inspection, certification, and registration processes.
Distributing New Titles
Once the new titles are registered, each homeowner will receive their individual freehold title. This marks the completion of the conversion process, granting full ownership of their land and residence.
Celebrating the Conversion
Completing the conversion is a significant milestone. Homeowners can celebrate the increased autonomy, value, and marketability of their newly converted freehold properties. It’s an achievement that can enhance the quality of life and provide long-term financial benefits.