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.