Cross Lease Conversion Gaining Traction In Slower Property Market

Cross leases are a common occurrence throughout the Auckland region. They were first introduced in the late 1960s as a way for property developers to avoid strict subdivision regulations and save on both time and costs. However, the implementation of the Resource Management Act 1991 and the Auckland Unitary Plan has essentially made cross leases redundant.

Despite this, many property owners in Auckland still struggle with the persistent problems associated with pre-existing cross-lease arrangements. It is this that leads many Auckland property owners to convert their cross lease to free hold titles.

Troy Patchett, owner of residential subdivision company, Subdivide Simplified has helped hundreds of Aucklanders subdivide their properties. Recently, he has observed a rise in interest in cross-lease to freehold conversion services, particularly among those looking to sell their property.

“A free hold property is a much more attractive prospect to buyers”, say Patchett.

“Now that the residential property market has slowed, vendors are keen to make their properties as attractive as possible to prospective buyers. Removing the restriction of a cross lease is an effective way to do this”.

In addition to being a more attractive prospect for buyers, vendors may also benefit from an estimated 7 – 20% increased in property value after converting their property to freehold.

In a cross lease setup, all property owners have a collective ownership of the land, but individually lease both the land and dwelling on it from the other owners. The lease is typically established for a term of 999 years.

The downside of this is, if you wish to make any additions to your home, consent from all other parties is required. Some cross lease arrangement may also feature additional clauses such as pet ownership and upkeeping presentation of the property.

“Many people want to have that total autonomy with their land”, says Patchett. “Converting your property from cross lease to freehold grants this”.

Patchett’s business, Subdivide Simplified helps Aucklanders navigate the often-convoluted subdivision process. They collate of all appropriate documents and reports, (drainage report, topographical survey, draft subdivision plan), submit a council application, prepare land transfer plan, execute conveyancing documents and make an application to LINZ for the new property titles.

“The process can be a bit daunting. Our clients appreciate having someone in their corner who knows exactly what is needed and who to talk to ensure a smooth subdivision process.”

For guidance in converting your cross lease to freehold, get in touch via the Subdivide Simplified website - www.subdividesimplified.co.nz.

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