Cross lease property problems creating cross owners

Joanna Pidgeon.

Colleen Pollard's Auckland place stands on an Epsom cross lease site where absentee owners, neighbourhood communications, title alterations and property upkeep and maintenance all worry her.

The Auckland District Law Society wants the law changed so more than 200,000 cross lease titles can be easily converted to the cleaner, less contentious and more common fee simple titles or unit titles, untangling people from big disputes with their neighbours and making it easier to change or sell such places.

Pollard said five places built in 1972 on a cross lease title caused trouble.

"The maintenance of the units is an ongoing problem," she said explaining devaluation fears.

"Owners have gone overseas and do not want to be contacted by neighbours with a problem," she said.

"It seems people buying a cross lease property are either not fully informed about the terms of the deed of lease or they know that if they decide not to maintain their property or to contribute to costs such as a fence along the driveway, other owners have no way of forcing payment except by the expensive procedure of taking the case to court."

A great aunt initially owned the property and erected a conservatory attached to the house.

"But she never changed the plan on the title. When we moved in six years ago, we enclosed the conservatory as part of the house and wanted it to be noted on the plan. We got all the owners at the time to sign the plan approving it. But what a nightmare," Pollard said.

A code compliance certificate and a fire wall were needed, upping the costs.

"Then our solicitor advised that to change the title we would need the permission of all owners and that if they wanted to seek their own legal advice on the matter, then we had to offer to pay for their legal bills. So we have given up," she said.

Joanna Pidgeon, a partner at Pidgeon Law in Auckland, an Auckland District Law Society councillor and member of the society's property law committee, said such situations were not uncommon.

A unit title would be far better in the Epsom situation.

"There is a process for doing that with owners' consent which is hard to get if people won't engage," Pidgeon said.

"Unfortunately, as the Unit Titles Act stands, with the addition of the conservatory not shown on the plan, this development cannot use the current easy conversion to unit titles process even if everyone agrees because the outline of the flats do not reflect the existing plan."

Other benefits to the Unit Titles Act are that it forces people who are overseas for more than three consecutive weeks to appoint a New Zealand representative and supply details to the body corporate and there is a regime for levying for communal expenses at the Tenancy Tribunal which would also deal with disputes, Pidgeon said.

"Cross lease owners are caught in a no-man's land, where it gets too expensive and too hard to deal with repair and maintenance issues, particularly when people refuse to engage. It often rests on the few house-proud people to maintain standards rather than every owner contributing, even though they are also legally responsible," she said.

"While people may be in breach of their lease for refusing to repair and maintain, it is costly to pursue. The Unit Titles Act has a much more streamlined process dealing with meetings, levying amounts and dealing with disputes."