Cross-Lease — Due Diligence Guide for NZ Buyers
Cross-lease is a uniquely New Zealand form of ownership where multiple owners share the freehold of a single parcel of land and lease their individual dwellings from each other. Each owner's dwelling is defined by a flats plan registered with LINZ.
How Cross-Lease Differs
| Attribute | Cross-Lease | Other Types |
|---|---|---|
| Land ownership | Shared undivided interest | Freehold: Full ownership |
| Building changes | Need co-owner consent + updated flats plan | Freehold: Council consent only |
| Key document | Flats plan | Unit title: Unit plan |
| Typical price vs freehold | 5-15% discount | Unit title: Varies |
Key Risks & Red Flags
Cross-lease has specific risks beyond standard property risks:
- Outdated flats plan: If previous owners altered the building without updating the plan, you inherit a non-complying title.
- Co-owner disputes: Disagreements about maintenance, noise, or changes can be difficult to resolve.
- Renovation restrictions: Any footprint changes need co-owner consent — which may be withheld.
- Selling difficulty: Issues with the flats plan or co-owners can make the property harder to sell.
- Insurance complications: Some insurers may have concerns about non-complying flats plans.
Due Diligence Checklist
- Compare the flats plan to the actual building footprint (consider a surveyor)
- Check all building consents against the registered flats plan
- Review the lease terms and any special conditions
- Understand the co-owner relationship and any history of disputes
- Calculate costs of any planned changes (including flats plan updates)
- Check if conversion to freehold is feasible and at what cost
- Standard checks: LIM report, building inspection, title review
Frequently Asked Questions
How do I know if the flats plan is up to date?
Compare the registered flats plan (from LINZ, via your lawyer) to the actual building. Any additions, extensions, or structures not shown on the plan indicate it needs updating. A surveyor can confirm.
What if my co-owner won't consent to changes?
Without co-owner consent, you cannot change the building footprint. You can try mediation, but ultimately the co-owner has the right to refuse. This is a fundamental limitation of cross-lease ownership.
Related Content
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.
LIM Report
GlossaryA Land Information Memorandum — an official council report summarising everything the council knows about a property.
Freehold
Property TypeFreehold (fee simple) is the most complete form of property ownership in New Zealand. The owner has full rights to the land and any buildings on it, with no co-owner dependencies or lease arrangements. Freehold is the most common and most straightforward title type for standalone houses.
Unit Title
Property TypeUnit title is the standard ownership structure for apartments, townhouses, and multi-unit developments in New Zealand. Each owner holds title to their individual unit and a share of common property, managed by a body corporate.
Leasehold
Property TypeLeasehold means you own the buildings but lease the land from a separate landowner (often a council, iwi, church, or trust). You pay ground rent for the right to occupy the land, and the lease has a fixed term.
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