What is a cross-lease?

A cross-lease is a means of obtaining a title for a share in the ownership of a piece of land and a lease of a dwelling on that land.  The joint owners effectively lease the buildings to one another.  Each owner holds a “composite” certificate of title which records the land-share plus the lease.  The lease is for a period of 999 years and the share corresponds to the number of dwelling units.  The cross-lease plan shows the dwellings as “flats” and is often called a “Flats Plan”.  The use of outdoor spaces is often defined by covenant (agreement) areas which are also outlined on the plan.

How is it different from a unit or “strata” title?

Unit titles are supported by separate specific legislation, the “Unit Titles Act 1972”.  This Act sets down in full detail how unit titles are to be created and managed.

A unit title provides separate ownership of a “principal unit” (the dwelling) and one or more “accessory units” (e.g. garages or outdoor spaces).  There are lower and upper limits prescribed for each principal and each accessory unit so that all of one’s dwelling and any other buildings or outdoor living areas, service courts etc are contained in compartments of space which one owns rather than leases.

As on cross-lease plans, there can be, and usually are, one or more “common” areas covering common driveway or common open spaces jointly owned by all the unit owners. 

A body corporate is required for the administration of each unit title arrangement.

Why are there two systems?

Cross-leasing was designed in the early 1960s to provide a simple means of obtaining separate titles for more than one dwelling on the same piece of land.

The unit title (also referred to as strata title) was designed to provide separate titles for buildings on different levels, i.e. for multi-story buildings.  Although intended for multi-level units, the unit title is, however, also used for single level developments by choice.

Which method should I use?

It is best to consult your solicitor to obtain advice as to which method may best suit your needs.  The unit title is especially necessary where one unit is above another. 

Staging of a development

It is possible to obtain separate title for an existing dwelling and then to stage the development of the property either by cross-leasing or by unit titling. 

Does it cost the same either way?

Costs are usually higher for unit titles than for cross-leases.  The survey plan is a little more complex, and separate valuations are needed for each unit.  Legal costs may also be higher. 

Is one method better than another?

It is generally considered that the better title is the unit or “strata” title because:

• It gives individual ownership of the buildings and private open spaces, with common ownership being limited to the nominated common areas, such as driveways and air spaces above the units.

• The Unit Titles Act protects the ability to finish a staged development even if planning controls may change.  Staged cross-lease proposals are not protected in this way. 

• Management issues may be better controlled by the body corporate.

• The unit title is supported by separate legislation and is often preferred as a stronger or more definitive title accordingly.

The cross-lease is simpler and more flexible.  Although it is generally acceptable and more commonly used through the city, there can be greater administrative problems and, in the absence of particular legislative controls, a little less certainty. 

For more detailed information as to the merits and/or disadvantages of each form of title, you should consult your solicitor and surveyor.

What is a subdivision?

A subdivision is the division of a parcel of land, or lot, into small parcels (sections).  This results in the creation of new lots, each with its own distinct title.

Can my property be subdivided?

This is determined by the appropriate zoning and other relevant planning controls of the District Plan and the presence or proximity of stormwater and sanitary sewer services and other appropriate services.  The Development Planner at your local council area office will be happy to discuss this with you.

How do I apply to subdivide my property?

Contact the Environmental Services helpdesk on 486 8600 for more information. You will be given application forms and checklists and advised to engage a surveyor to help with the process.  (Council officers cannot recommend specific surveyors, these are best chosen by recommendation from friends or acquaintances or through your local telephone directory.)

What costs are involved?

Apart from the cost incurred by private surveyors, you will also have to pay the appropriate council processing fee.  This fee includes the time spent by council staff,  planner, subdivision officer, engineer and administration in processing the application plus relevant hearing fees when a decision is made.  There may also be a reserve contribution and Wastewater Levy which is required in most cases.

What is the process?

You submit your application to council which includes the relevant plans and supporting documents.  The application is assessed and a report presented to the relevant community board hearing committee.  Provided we have all the correct information, this process will take approximately 20 working days.

What happens once the application is approved?

A subdivision consent is issued pursuant to Section 105 of the Resource Management Act 1991 (RMA) which will detail any conditions that need to be complied with.

What is a 223 approval?

A 223 approval is an approval by council of the survey plan in accordance with Section 223 of the Resource Management Act  1991.  The plan to be approved is drawn by the surveyor on transparent paper and shows the boundaries, areas, and in some cases easements, covenants, etc.  This plan is signed by the owners, surveyor and council and is then sent to Land Information New Zealand (LINZ) for approval.  This approval extends the life of the consent issued under Section 105 for another 3 years.

What is a 224 approval?

This is the certificate that enables new titles to be issued by Land information New Zealand (LINZ).  All conditions must be complied with and an as-built plan is usually required which identifies the final location of the new services.

How long have I got to complete the works?

The works must be completed and a completion certificate issued pursuant to Section 224(C) of the RMA, prior to the Section 223 approval lapsing.

Do I need to request a 224 Certificate (224C)?

Yes, you need to advise council that you have completed all the required conditions of the subdivision approval and where necessary submit as-built plans and bond documentation.  Council will then inspect the site, ensure that the conditions have been complied with and issue a final charge sheet.  On completion the 224(C) is issued.

When can I start building on the site?

You can only start building on the site once the 224(C) has been issued unless otherwise provided for by the council.