Getting Building Permissions on Cross Leases

Cross leases were an early form of unit title that is no longer created, with full separate unit titles now the norm. There are advantages and disadvantages for owners with cross leases. The main advantage is that you get some control over what your cross lease neighbours can build on their properties – this gives you protection against any new building that will either:

1. Impact your sunshine or daylight levels
2. Impinge on your views- where these are of notable value e.g water or mountain views
3. Impact easy egress to your property
4. Infringe your privacy – for instance, if they were to build a deck that looked straight into your main living area
5. Add a noise nuisance – e.g adding a garage to be used as a music practice area
6. Increased any water run off to your property
7. Use more than your share of any building allowance – where cross leases are a 50:50 undivided share, it is reasonable that each party has 50% of the building allowance. This could be a tricky point as the occupant of the largest private use share may seek to gain more than 50%. In this case, i would work out what your percentage share of the site is and see if you can keep within that amount; otherwise, take your chances.

Or any other factor that may reduce the enjoyment you have of your own property. This is why even the color of the cladding etc needs approval.

So what happens when a cross lease neighbor refuses to give consent? Most cross lease agreements stipulate a clause stating that whilst consent must be gained, it must not be unreasonably withheld.

If you meet all the above requirements – and your neighbors refuse to grant approval, you can take the risk and continue with the building. The outcome of this is that the neighbors may seek an injunction. However, to do so they have to have reasonable grounds that you do not/will not meet one of the above criteria AND they must put up a bond to cover all of your legal costs. In NZ, appearances in Court are not required for injunctions, it is all done by memorandum, and the defendant is not required to stop building in the meantime. This normally prevents most spiteful neighbours with no grounds from attempting to lodge an injunction – however, there are those who are just so entitled that they think they have grounds, when in legal terms they do not.

So tread carefully, but don’t let cross lease neighbours without grounds for objection to prevent you from achieving your building goals.

DISCLAIMER: I am not a legal professional and provide this information as my own opinion based on my own experiences. Seek legal advice if you are considering making changes to your building on a crosslease site.

4 Responses to “Getting Building Permissions on Cross Leases”

  1. Lana says:

    Dear Sir/Madam,

    I’m very glad to find this article because i’m currently in a similar situation: I’m planning to build a minor dwelling for my parents who are currently living in the main dwelling with me in my back-yard, which will not in any way block their light or view or access to their property.

    However my neighbour came back to us saying that they can’t give us permission because they believe that adding such a minor dwelling will decrease their value of their property. They also said that they are worried that one day i’ll sell my house to an investor and the new house owner can put two sets of tenants there.

    I consulted a few experienced local real estate agents. They don’t think it will impact their value at all. But they might be just saying that because I am their client.

    My parents are getting old and i got a new baby. We really need another dwelling for my parents. And this is the only way we can afford doing.

    I really don’t know what to do now. My friends told me just to ignore them. But i’m not sure whether they have a ground to object my project.

    Have you had any similar experience like this? Do you think my neighbour has a ground for this?

    It would be really appreciated if you could give me some ideas and suggestions.

    Look forward to hearing from you.

    Many thanks!

    Regards,
    Lana

  2. Esmart says:

    Hi Lana

    So sorry to hear you are having these complications, when clearly you are a lovely person wanting to care for your parents.
    My advice is to make a visit to your local council planner. I found this very helpful. They made it very clear that I did not need my neighbours permission to get a building permit, as long as I meet all the permit requirements. They will also give you solid advice as to whether anything you are planning to do will negatively impact your neighbour in any way. Based on that, you can make the decision to proceed. Many Councils will also now provide you with a written statement [for a fee] as to their position on your pending application. Some people have found that this hasn’t been bullet-proof, but it will certainly help.

    If your neighbours really object, the worse they can do [other than be petty and try to make life hell for you], is to seek an injunction. My understanding of this is that they will need to place a sizeable bond with the Court to cover the cost, and they will need firm grounds. The entire procedure is done by memorandum only, in a day or two, so there is no need to make an appearance. They cannot stop you building in the meantime, and if they are found to have no case, they will have to pay any legal costs your have incurred, and court costs [hence the bond]. Please seek your own legal advice on this, I am purely sharing my understanding here.

    It’s a really horrible situation to be in, and even though I do understand your neighbours perspective [which I must admit would also be my concern] there may be other ways to deal with this. For example, you may agree to a covenant on your title that the property will never be rented to multiple tenants – other than tenants in common, such as the parents or siblings of those renting the main house. The covenant will apply to all future owners of your property, but it could be written so that it is no longer valid should your neighbours ever sell their property.

    Try really hearing what they are concerned about, and dig underneath it to find ways to address their concerns.
    Everything is negotiable.

    My best wishes for your success, let us know how you get on.

  3. Hello, I think your site might be having browser compatibility issues.
    When I look at your website in Ie, it looks fine but when opening
    in Internet Explorer, it has some overlapping.
    I just wanted to give you a quick heads up! Other then that, awesome blog!

  4. Esmart says:

    Thank you so much for taking the time to alert me to this issue.Much appreciated. Nic

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