Defective Cross Lease Titles

Friday, October 11, 2013

Looking at buying or selling a cross lease property? One of the most common issues plaguing cross lease properties throughout New Zealand is the likelihood the flats plan (which is meant to show the boundary lines of the house, garage etc) is out-of-date and has not been updated following structural additions or improvements. The reason: it's not, strictly speaking, necessary from Council's perspective, and building consent may be granted without any reference or requirement to update the property's flats plan. The flow-on effect from this is the flats plan (which is attached to the certificate of title) is "defective", arguably giving a purchaser the right to pull out of an otherwise unconditional sale and purchase agreement.

Rectifying a defective cross lease title's flats plan is relatively straightforward and mainly the domain of a registered surveyor. Basically, the property is re-surveyed and a new flats plan registered with Land Information New Zealand. To do this, the cross lease neighbours must have consented to the works, Council needs to grant building consent, and the works need to have been completed. The costs involved (circa $5,000.00) are significant enough to put most people off doing what is often believed to be non-essential paperwork!

The trouble arises when it comes to the property being sold. Purchasers who are properly advised by their lawyer about the defective flats plan will almost always demand a discount on the purchase price, on the basis they will have to arrange for the flats plan to be corrected after settlement. Vendors have little ability to argue without risking the purchaser pulling out of the purchase entirely. Well-prepared vendors who are aware of the issue can avoid it by inserting a condition in their sale and purchase agreement, effectively saying that the purchaser accepts the defective flats plan and waives any right to require such to be rectified. Well-prepared purchasers, of course, should know what this means in dollar terms and reduce their offer accordingly!

Practically speaking, a defective flats plan is of no real concern to the owner of the property until they wish to sell (although sometimes it can affect finance). Whether you are the potential purchaser or the owner of a defective flats plan cross lease property, you should know and understand the issue before entering into an agreement. $5,000.00 is $5,000.00 after all.

Brandon Cullen | Partner | Albany Office
(09) 966 3609 |

© McVeagh Fleming 2013

This article is published for general information purposes only.  Legal content in this article is necessarily of a general nature and should not be relied upon as legal advice.  If you require specific legal advice in respect of any legal issue, you should always engage a lawyer to provide that advice.  

Recent Posts


Murrell v Hamilton Trusts Bill Dismissal Ship Registration Trustee Duties Section 21 PRA Document Disclosure Furniture Order Company Structuring Marriage Charities Body Corporate Property Income Contracting Out Agreements Law Reform (Testamentary Promises) Act 1949 Break up Tenant Family Trusts Clayton case Reckless Trading Wills Act 2007 Section 11 Financial services provider (FSP) Charity begins at home Temporary Order Invalid wills Testamentary capacity Case Study Pattern of offending Family Executors duty Sale of Goods Personal Data KiwiSaver Frustration Anti-money laundering (AML) Credit Contracts and Consumer Finance Act 2003 (CCCFA) Flexible Working Arrangements WINZ Civil union Unequal Sharing Privacy Policy Rest Home Subsidies Resident Gifting Testamentary writing Seperation Maritime Law Skilled migrant points Trusts ''Best Endeavours'' Matrimonial Home Interpretation of documents Casual employee Repayment Harrassment General Data Protection Regulation (GDPR) Maritime Lien Acknowledgment Data Privacy Law Lease Titles Duress Re Estate of Campbell Expression of interest Mortgage Blackwell v Hollings Amundson v Raos Commercial Law Part payment Employer Will that do Partnership based work visa Charity Entrepreneurs Companies Act 1993 Trust Confidentiality Loss of income Commerce Commission Shareholders' Agreement Relationship Property Consumer Guarantees Act 1993 Psychological abuse Limitation Act 1950 Wills Act 2007 Section 14 Violence Validity of Wills Start Up Company Divorce Abuse Mortgagor Gifts Immigration New Zealand Ship's Mortgage GDPR Compliance Employment Relations Act 2000 Financial Advisers Act 2008 Splitting Up Fair Trading Act 1986 Constructive trusts Indoor Management Rule Residential Erceg v Erceg Data Protection Officer Employee Rights Domestic Violence Act 1995 Separate Property Directors' Duties Temper Commercial Company Law Contract Law Property (Relationships) Act 1976 Subsidies Immigration Data Breach Business Strategy Lease Wilson v Donnellan Hawkes Bay Trustee Company Limited v Judd Solvency Test Estate Administration Privacy Act 1993 Limitation defence Dividing Property Interest Unfair contract terms Compensation Section 15A Employer obligations Legislation update Consumer credit contracts Grey Power Fair share Limitation period Re Estate of Feron Ship Personal Properties and Securities Act 1999 Mainzeal Ministry of Social Development Trust busting Six years Vessel survey Commercialisation of IP Beneficiary Rights Tamarapa v Byerley Financial Markets Conduct Act 2013 (FMCA) Insurance Intellectual Property Will Financial Abuse Wills Act 2007 Asset Protection Auckland Office Intimidation White v White Recovery of money Albany Office Litigation Family Court Employment Physical abuse Verbal abuse Incapacity Eviction SMC Occupation Order Section 15 Interpretation Act 1999 Section 29 Wills Act 2007 Section 8 Promise Consumer Protection Professional Services Stopping violence De facto Living standards Sharing Economic disadvantage Changes Domestic Violence - Victims' Protection Act 2018 Financial services Landlord Skilled migrant Principal Terms of Trade Domestic violence Resident Visa Offending Interpretation Act 1999 Insolvency Testamentary Promises Division of Functions Claims against estates Vessel surveyor Non-Violence Termination Tenants Twelve years IP Protection Elder Law PRA Commercial Property Partner of resident Consent from Data Subjects Technology EU Privacy Authority Protector Testamentary freedom Section 182 Family Proceedings Act 1980 Financial products Ministry Health and Safety Reform Bill Family Home Data Subject Character requirements Acknowledgment of Debt Limitation Act 2010 Ilott v Mitson 2017 UKSC 17 Domestic Violence Leave Personal Customary Authority Creating Trusts Trust Check Up Data Subjects in the EU Visa application Broadbent v Ministry of Social Development Zero Hour Contracts Medical Processing Personal Data Lump sum Holiday pay Vessel Sale and Purchase Section 21 Agreements Valid wills Administrators duty Lankow v Rose Wills Work and Income 50/50 Split Business Mortgagee Holidays Act 2003 Family Protection Act 1955 Contract and Commercial Law Act 2017 Protection Order SN v MN [2017] NZCA 289 Undue influence Due Diligence Employee Deceased's wishes