What is a "Cross Lease Property"?
Q. I own a residential property in Auckland, New Zealand. There are a total of five houses sharing the same strip of land and my house is situated at the end of the strip. I have been told that my property is what is commonly known as a "cross lease property". I wish to erect a deck at the backyard conjoining the north-facing living area to take advantage of all day natural sun light. The backyard is in an area of land where I have exclusive use. I have contacted a number of builders and obtained a satisfactory quote from one of them. Do I need the permission of the other four property owners to erect the deck on my property? Are there any legal issues that I need to be aware of in this situation?
A. As the owner of a cross-lease property you have an undivided share in the freehold title of land as a tenant in common with your four neighbours. In respect of the strip of land where the five houses are situated, you also have a long term lease (usually spanning for 999 years) for your property. Under the lease, you and your four neighbours are both lessors and lessees for the respective house. The leases govern the relationship, and each role carries with it certain rights and obligations.
The area you refer to is under your lease the "exclusive use" area for your lease. This area can be treated as your own for the purpose of use and occupation, but not ownership as you and your neighbours each own 1/5 share of the land. You are able to use and enjoy this exclusive use area without interference from your co-lessors (i.e your neighbours) as long as you use it in a manner that does not breach the terms of the lease.
As a lessee, you must comply with the terms of the lease. In general, the leases require that a "lessee will not make structural alterations to the building nor erect on any part of the land a building, structure, or fence, without the prior consent of the co-lessors". Depending on the term of the lease, the consent may need to be in writing. In any event, it is prudent for you to obtain a written consent in case a dispute arises at a later time. If consent is not obtained, a co-lessor can seek an injunction from the court to halt the building works until the dispute is resolved.
A deck may in some instances be classified as a structure for building regulatory purpose, and in those instances, a building consent is required from the Council. Generally a deck less than 1m high which is not enclosed will not be regarded as a structure. However, it is always prudent to check if a building consent is required.
In terms of the lease, if an addition is made to a building, the flats plan showing the delineation of the buildings on the land title may need to be updated. If the plan does not match what is actually there on the property, this may be considered a defect in title and can cause you problems when you sell your property in the future.
While most leases specify that your co-lessors' consent cannot be unreasonably withheld, it would be prudent for you to seek their consent to even minor building works such as the building of a deck.
What is set out above is some general points for you to note. As each case is different from another, you are advised to seek professional legal advice. It is important to have a lawyer to check your property title and advise you on the terms of lease instrument.
The above information is intended to provide general information only. The contents contained in this article do not constitute legal advice and should not be relied on as such.