Cross-Lease vs Freehold
Freehold gives you full ownership of land and buildings with no co-owner dependencies. Cross-lease means shared land ownership with restrictions on changes — typically 5-15% cheaper but less flexible.
Side-by-Side Comparison
| Attribute | Cross-Lease | Freehold |
|---|---|---|
| Land ownership | Shared undivided interest with co-owners | Full ownership of your land parcel |
| Building changes | Need co-owner consent + updated flats plan | Only need council consents |
| Typical price | 5-15% cheaper than equivalent freehold | Premium price for full ownership |
| Flats plan | Must match actual building footprint | Not applicable |
| Co-owner disputes | Possible — shared obligations and rights | Not applicable |
| Bank lending | Generally available but some caution | No title-related lending issues |
| Conversion | Can convert to freehold ($15,000-$40,000/unit) | Already the premium title type |
Cross-Lease Explained
Cross-lease is a uniquely New Zealand title type where multiple owners share the freehold of a single parcel of land and lease their individual dwellings from each other. The key document is the flats plan, which shows each dwelling's footprint and exclusive-use areas.
The main limitation is that any changes to the building footprint (extensions, large decks, carports) require consent from all co-owners and an updated flats plan — which can cost $10,000-$20,000 for the survey and registration.
Freehold Explained
Freehold (fee simple) is the most complete form of property ownership. You own the land and buildings outright, with no co-owner dependencies. You're free to renovate, extend, or develop (subject to council rules and any registered interests like easements or covenants).
Freehold commands a premium in the market because of its simplicity and flexibility. It's the easiest title type for banks to lend against and the simplest for buyers to understand.
Do You Need Both?
You can only have one title type per property, so this is an either/or choice. The decision comes down to budget versus flexibility. Cross-lease can be a smart purchase if you understand the limitations and don't plan major external changes. Freehold is worth the premium if you value full control.
Which Should You Get First?
If you're comparing similar properties with different title types, start with the cross-lease due diligence. Check the flats plan against the actual building, verify co-owner relationships are healthy, and calculate the cost of any planned changes including flats plan updates.
Frequently Asked Questions
Can I convert my cross-lease to freehold?
Yes, if all co-owners agree. The process involves subdividing the shared land into separate freehold titles. Costs typically range from $15,000-$40,000 per unit for survey, legal, and council fees.
Are cross-lease properties harder to sell?
Cross-lease properties generally sell well but may take slightly longer and attract a smaller buyer pool. Issues like outdated flats plans or difficult co-owners can make them significantly harder to sell.
Related Terms
Cross-Lease
GlossaryA form of property ownership where multiple owners share the freehold of a single piece of land and lease their individual dwellings from each other.
Freehold
GlossaryThe most complete form of property ownership in New Zealand, giving the owner full rights to both the land and any buildings on it.
Unit Title
GlossaryA form of property ownership for apartments, townhouses, and other multi-unit developments where each owner holds title to their individual unit and shares ownership of common property.
Easement
GlossaryA legal right allowing someone to use part of another person's land for a specific purpose.
Unit Title vs Freehold
CompareUnit title is for multi-unit developments (apartments, townhouses) with shared common property and a body corporate. Freehold is standalone ownership with full control. Different products for different needs.
Cross-Lease vs Unit Title
CompareBoth are multi-unit ownership structures, but they work very differently. Cross-lease involves shared land ownership with a flats plan, while unit title has a formal body corporate with a unit plan under the Unit Titles Act 2010. Unit title is the modern standard; cross-lease is a legacy NZ structure being gradually phased out.
Leasehold vs Freehold
CompareFreehold means you own the land outright. Leasehold means you own the buildings but lease the land from a landowner (council, church, iwi, or private entity) and pay ground rent. Leasehold is significantly cheaper upfront but carries ongoing costs and risks around lease expiry and rent reviews.
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