cross lease pros and cons?

[orangeskye]

Thanks for the input.

My understanding is that it is a cross lease simply for the reason others have mentioned - it was a cheaper option at the time. Each property has sufficient land to warrant an ordinary subdivision today.

I'm still undecided about this one - perhaps that means it isn't a goer!

[motivated]

If you can get agreement of the other owner and council it may add value to the property if you convert it to true freehold. It is likely that the council will agree (but not absolutely guaranteed until you investigate) to allowing this--usually at minimal cost because they are 'existing' Some councils will have some requirements but usually not onerous because the properties will usually have seperate power, water etc

Once it becomes true title, its market worth usually increases--this will depend on local market conditions--some markets loath xlease, others readily accept them without question

Best to check with a local valuer and surveyor to get a feel for gain in value, and likely costs

[Eugene]

I bought a cross leased property a couple of years ago and didn't hesitate, I have had no problems and don't expect any.
I did have to contact the other owner as tenants wanted to instal Telstra Clear for broadband, and would involve digging up driveway, this I had not expected, but managed to reach agreement with owner with Telstra Clear guaranteeing minimum of digging.
After all that, it was a non event, no digging, as Telstra Clear realised had another way to reach section.

[revdev]

I did have to contact the other owner as tenants wanted to instal Telstra Clear for broadband, and would involve digging up driveway...

Did the tenants pay for this?

[Eugene]

Yes the tenants paid, it didn't cost much in the end, but tenants were happy to pay even when involved digging up driveway. They always had the option of using Telecom so fair that they paid.

[klauster]

Important things are said, the deal breaker might be the cross lease terms and conditions, however I prefer cross lease investment properties because of lower rates, less land to deal with and “control” dealing with neighbours. On cross lease properties trees and pets are not a problem. Over the time certainly the option to buy the other party is a prospect, too.

[north shore]

Would anyone know the answer to this one: If you have a cross lease property divided between 2 and its big enough to change to fee simple, but it is off a shared driveway with 9 other houses can you still change it to fee simple?

[Ivan McIntosh]

Should be able to. I'd need to see the title first, but the odds are that it is the underlying freehold that has the interest in the shared driveway, whether that be by easement or an undivided share in the driveway lot. Since you're just reverting from cross-lease to the underlying freehold, there is a good chance all would be fine.

[north shore]

Thanks, is it worth changing from a cross-lease, I'm sure North Shore City or now Auckland City has a host of charges to make it happen!!

[PatMat]

IMO cross lease is all right for buy & hold as the price tends to be lower comparing to freehold, therefore better rental yield. Not so good for property trading as it's harder to sell.

Converting from crosslease to freehold takes some time and money which is again not so much of a problem when selling after a long enough period of holding. Quite a blocker for a fast moving trading stock though.

In your case, if it ticks all the other boxes, I wouldn't worry.