Cross-Leasing - Diana Clement (Herald)

[Famousone]

Does cross-leasing actually still occur?

I thought the central government stopped this in 1992?

I have heard so many people in property talk about cross-leasing as though it still occurs? Does it still occur?

Diana Clement refered to it in Sat morning herald as a strategy that still exists.

Please could anyone enlighten me as to whether it does, or does not?

And if it does not, ....then why are so many"experts" still refering to it as though it is still a strategy for investment?

Thoughts Please.

[Don and Liz]

we were involved with a small job recently and the surveyor was talking cross leasing as a plan B if the council knocked the subdivision - he was the only person who i have heard mention it lately - anyone done it lately

[xris]

I think you will find that crosslease titles are quite legal, to the relief of one or two million people, but that they are now rarely employed when lodging a new title. This is because they have always had their attached problems which were not so evident when cossleasing first came in, and which are now seen as outweighing the alternative opinions, such as fee simple with easements and encumberances. Some councils have also amended local laws to facilitate the use of non-crosslease titles.

In some cases though there may not be a simple alternative so crosslease is the better of two evils.

xris

[Famousone]

Some councils have also amended local laws to facilitate the use of non-crosslease titles.
xris

Thanks Xris....would you care to explain in more detail?

[xris]

Hello famousone,

An example I have just invented follows, and is not based on any particular city.

The smallest allowable land area for a fee simple title is 500m2 minus set areas for driveway, building set back from boundaries etc.

A 1,100m2 site becomes available, ie two 500m2 fee simple sites. Good! But take off the areas needed for driveways etc and the site areas become $460m2 and 490m2. Drat! Too small to subdivide into two fee simple titles so we must look at crosslease.

But, the local council then passes a by-law allowing one driveway access to two fee-simple sites, with the driveway area being part of one title (A) but an easement exists on that title for the benefit of the other property (B) allowing B to use A’ driveway (ie the driveway effectively in shared.

By doing this less ‘dead’ land needs to be taken into account, or rather taken off the total land area.

Thus the two potential sites minus driveways, set backs etc now becomes , say, 510m2 and 540m2. Great! This 1,100m2 site can now be split into two fee simple sites.

Each site will differ depending on its shape, contours etc. Sometimes a very large site (eg long and narrow bounded by a river) is of less use than a smaller square corner site.

This is a very simplistic example. You may be better off getting advice from a surveyor or some of the developers on this (web)site.

xris

[Famousone]

Thanks for taking the time to explain Xris

[donna]

It is not uncommon to find 3 or 4 properties sharing the same land under cross lease titles.

We have one property on a cross lease title. We have the lions share of usable land around 600 sq m. yet we pay a half share of the rates with the much smaller property residing in front (around 300 sq m.)

Cheers,

Donna