Property guidance by Quay Law
Property guidance by Quay Law
Unit title guidance from Quay Law
Ian Mellett, Barrister and Solicitor, Quay Law
Unit titles and cross leases are both used for properties where several dwellings share a site, and they are often confused. The legal structures are quite different, and so are the obligations of the owners.
Under a unit title, each owner owns their unit, and the body corporate owns the common property on behalf of all owners. The arrangement is governed by the Unit Titles Act 2010.
Under a cross lease, all owners together own the land in undivided shares. Each owner then holds a long term lease of their own dwelling from all the other owners. The arrangement is governed by the lease and the flats plan, rather than a dedicated statute.
Cross lease owners commonly need the consent of the other owners to alter their dwelling, and the flats plan should be updated to show any change to the building’s footprint. A common problem in cross lease purchases is a dwelling that has been extended without the flats plan being updated, which can create a defect in title.
In a unit title, alterations affecting common property or the structure generally require body corporate approval, according to the rules and the Act.
A unit title has a body corporate, a budget, levies and a long term maintenance plan. A cross lease has none of these. Cross lease owners share responsibility for common areas, such as driveways, according to the lease, and must agree between themselves on how to deal with shared costs.
In some cases, a cross lease can be converted to freehold titles or a unit title, but this generally requires the agreement of all owners, survey work and council approval. It can be a worthwhile but involved process.
A plain comparison of freehold, unit title, cross lease and leasehold property in New Zealand, and why the title type matters before you make an offer.
A plain English guide to unit titles in New Zealand: principal and accessory units, common property, the unit plan and the body corporate.
How unit title and freehold ownership differ in New Zealand, including control, costs, maintenance and due diligence, explained by Quay Law.
If you are buying a property on a shared site, we can confirm the title type and explain what it means before you commit.
If you are buying or selling a unit title property in Auckland, we recommend speaking with us before you sign an agreement. Contact Ian Mellett at Quay Law, Barrister and Solicitor, by completing our enquiry form below, or call us on 09 523 2408.
The information on this page is provided for general information purposes only and is not legal advice. Every transaction is different, and all matters should be discussed with the team at Quay Law.