Defective Title

[Ram]

Hi Im just in the process of looking to update my flat plan title as I have done a consented extension of our house on a crosslease property.

Already have CCC and neighbor all good with it.
Now that the plan is defective, I'm planning to update it.

How much does updating a plan cost nowadays?
and would you consider converting to fee sample instead?

THanks in advance to this who will reply!

[donna]

Can be expensive converting to fee simple titles but buyers prefer them. At last count $30K ish to do it but I doubt the fee is the same for all cross leases. Ask a property lawyer.

cheers
Donna

[Ram]

Thank you for the reply.
What are the possible pitfalls when updating it to fee simple?

[brokerman]

Hiya. Last defective Title I saw was in January 2022 and $12,500 to correct.
The cost of getting to Fee Simple is impossible to guess as it all depends on the nature of the cross lease, how many parties and the layout of the land.
Hope that helps, I always say make a defective title the Vendors issue, don't take on another's mistakes.

[RollingCloud]

If you are going to spend the $ to update the flats plan you might as well try to go fee simple. It is better for you and the neighbour in the long run. Question is do they want to and do they want to contribute as it will be of benefit to them as well. If it is just 2 on the crosslease it will make it easier. Yes you would have to get a quote on that. I think there is a company that specialises in doing them and so offers a discounted rate. Google it.

[donna]

Hiya. Last defective Title I saw was in January 2022 and $12,500 to correct.
The cost of getting to Fee Simple is impossible to guess as it all depends on the nature of the cross lease, how many parties and the layout of the land.
Hope that helps, I always say make a defective title the Vendors issue, don't take on another's mistakes.

Interesting as I think buyers in the heat of the market probably didn’t even care re the title. For example someone near us bought a cross lease property with a defective title and didn’t blink.

The additional room got the CCC and that’s what mattered. Plus what if all future buyers just kicked the can down the road then there is no cost - just a thought.

There must be thousands of defective titles aye.

cheers
Donna

[donna]

If you are going to spend the $ to update the flats plan you might as well try to go fee simple. It is better for you and the neighbour in the long run. Question is do they want to and do they want to contribute as it will be of benefit to them as well. If it is just 2 on the crosslease it will make it easier. Yes you would have to get a quote on that. I think there is a company that specialises in doing them and so offers a discounted rate. Google it.

can all cross leased titles be converted to fee simple?

cheers
Donna

[brokerman]

Interesting as I think buyers in the heat of the market probably didn’t even care re the title. For example someone near us bought a cross lease property with a defective title and didn’t blink.

The additional room got the CCC and that’s what mattered. Plus what if all future buyers just kicked the can down the road then there is no cost - just a thought.

There must be thousands of defective titles aye.

cheers
Donna

Hi Donna

That's part of the issue, buyers in the heat of the market take huge risks, some of which will bite hard.

I wonder how many think they have full insurance cover when they don't.

[brokerman]

can all cross leased titles be converted to fee simple?

cheers
Donna

In theory they can, in theory!

[Ram]

Hi Brokerman,

Do you have any company to suggest that deals with updating flat plans? We get quotes to 20-25k
Cheers!

[John the builder]

Thank you for the reply.
What are the possible pitfalls when updating it to fee simple?

pit falls are that the services especially wastewater may be a shared system(say a common 100mm drain). Council can make you separate the dwellings or create a public connection 150 drain that becomes council asset.

stormwater can be an issue also depending on council

I am unsure if mains power is treated the same but it is common for cross lease to use neighbors to run the mains under the floor to the other neighbors.

council treats this as a further subdivision of the property I would have a quiet word with council first before approaching neighbor. Be careful about sharing costs as the neighbors may be the ones with the drainage issues for example. Surveying is only one cost there is council and some legal costs.

[Ram]

If this is the case then best to just update the plans rather than update it to a fee simple.

[John the builder]

If this is the case then best to just update the plans rather than update it to a fee simple.

maybe.....but you have to do the maths first? It is certainly better to have a better title and this adds value. It may unlock further development opportunities for the site as well. Purchasers can buy with confidence that a neighbour cannot stop them putting their mark on thier home (exterior colours landscaping extensions redevelopment,,,,)

doing nothing is usually the cheapest option but maybe not the smartest.

[donna]

^^ agree. If you have a rental that really can not be improved much that would require consent from the other owner then updating plans may suffice.

we have one cross lease in this situation and another that would be better as a fee simple as it does have opps to improve its footprint.

cheers

Donna