Cross-Lease vs Unit Title
Both 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.
Side-by-Side Comparison
| Attribute | Cross-Lease | Unit Title |
|---|---|---|
| Ownership structure | Shared undivided interest in land + lease of your dwelling | Individual title to your unit + share of common property |
| Governing legislation | Property Law Act (general lease provisions) | Unit Titles Act 2010 |
| Governance body | No formal body — relies on co-owner agreement | Body corporate with AGMs, committee, and formal rules |
| Key plan document | Flats plan (shows building footprints) | Unit plan (defines unit boundaries and common property) |
| Renovation rules | Need all co-owners' consent + updated flats plan for external changes | Body corporate approval for changes to common property or exterior |
| Ongoing levies | No formal levies — shared costs by informal agreement | Body corporate levies ($2,000-$15,000+/year) |
| Bank lending | Generally available but banks check flats plan accuracy | Well understood by banks — standard lending criteria |
| Dispute resolution | Disputes go to court — no specific tribunal | Tenancy Tribunal handles body corporate disputes |
Cross-Lease Explained
Cross-lease is a uniquely New Zealand title structure created from the 1960s onwards as a cheaper alternative to subdivision. Multiple owners share the freehold of a single piece of land, and each owner leases their dwelling from the other owners. The flats plan registered on the title defines each dwelling's footprint and any exclusive-use areas.
The main challenge with cross-lease is governance. There is no formal management body — co-owners must cooperate informally on shared expenses like driveways, fencing, and drainage. Any change to a building's footprint requires unanimous consent from all co-owners and an updated flats plan, which can cost $10,000-$20,000. If a co-owner is uncooperative, you may be stuck.
Unit Title Explained
Unit title is the modern multi-unit ownership structure governed by the Unit Titles Act 2010. Each owner holds an individual title to their unit (defined by a unit plan) plus a share of common property. A body corporate — comprising all unit owners — manages shared areas, insurance, and maintenance.
Unit title provides formal governance through the body corporate. There are clear rules about meetings, voting, levies, long-term maintenance plans, and dispute resolution. This structure is well understood by banks, lawyers, and real estate agents. The trade-off is less individual autonomy — you must follow body corporate rules and pay regular levies.
Do You Need Both?
You will only encounter one title type per property, so this is an either/or comparison. Cross-lease is common in older suburban developments (especially 1970s-1990s townhouses and back sections). Unit title is standard for modern apartments, townhouses, and multi-unit developments. If you have a choice between similar properties, unit title generally offers better governance and clearer rules, but cross-lease can work well if the flats plan is accurate and co-owner relationships are good.
Which Should You Get First?
For cross-lease, prioritise checking the flats plan against the actual building footprint and assess the co-owner situation. For unit title, request the body corporate disclosure statement (pre-contract or pre-settlement) and review the long-term maintenance plan and financial health. Both checks are essential before committing.
Frequently Asked Questions
Can a cross-lease be converted to unit title?
Yes, though it is less common than converting to freehold. All co-owners must agree, and a unit plan must be prepared and deposited. The process involves survey, legal, and council costs. Converting to freehold (fee simple) by subdivision is more common.
Which is better for investment properties?
Unit title is generally preferred by investors because the governance structure is clearer, levies cover shared maintenance, and bank lending is more straightforward. Cross-lease can work for investors but adds complexity around co-owner consent and flats plan compliance.
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.
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.
Body Corporate
GlossaryThe legal entity made up of all unit title owners in a multi-unit development, responsible for managing common property and shared affairs.
Flats Plan
GlossaryA registered diagram showing the building footprints and exclusive-use areas on a cross-lease property.
Cross-Lease vs Freehold
CompareFreehold 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.
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.
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.
Make Smarter Property in New Zealand Decisions
Get clarity on property documents, titles, and risks with AI analysis.
No commitment required · Start free