What is a "Cross Lease"?


A cross lease title consists of both an undivided share in the fee simple land and a leasehold estate in the building(s).

A number of owners own and share the fee simple land.  Each building on the land (referred to as “flats” or “areas”) is leased from all the land owners (known as “Lessors”) to the owner (known as “Lessee”) that owns that particular flat or area.  So if you purchase a cross lease property and there are three flats on the fee simple land, you will own an undivided one-third share in the fee simple land and an estate in leasehold in the house you are purchasing on that land. The terms and conditions attached to a cross lease property are contained in the “Memorandum of Lease” document which is registered against the title to the property.  

A restriction on cross lease properties is that if you wish to do any alterations to the existing building on the land, or add a building to the land (even a deck) you need to get the written consent of the adjoining land owners.  Also, if the work you are doing results in the outline of the buildings on the land changing, then you may be required to have a new flats plan prepared by a surveyor showing the updated outline of the building/buildings and the new flats plan will need to be registered and a new title issued for that particular flat.

An example of the legal description to a cross-lease property would be,
an undivided one-third share in 1240 square metres more or less being Lot 1 on Deposited Plan 12345, together with an estate in Leasehold in Flat 1 Deposited Plan 67891

If you have any questions regarding the above, or wish to seek advice regarding buying residential property, please contact property lawyer Wade Hansen by phone on 837 6885 or email wade.hansen@smithpartners.co.nz


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