Can you get a cross lease converted to freehold?

If you are buying a house that shares its section with the neighbours, you may be wondering whether you could turn it into ordinary freehold later. You can. But every owner on the section has to agree to it, and any one of them can say no.

So before you count on it, ask the agent whether the other owners have ever discussed converting. If nobody has asked them, you are hoping rather than planning.

A cross-lease means you own a share of the whole section with your neighbours, and you lease your own flat back from all of the owners, usually for 999 years. So nobody owns a piece of ground. Four flats means four people each owning a quarter of the whole thing, with a lease over the bit their house stands on.

Converting it means ending that and giving each flat its own patch of land. That is fee simple, you own the land itself, with no time limit and no rent to pay. You will also see it called freehold. Each flat gets its own title, the official record of who owns a property and what rights and restrictions come with it.

Why people bother

Two reasons.

You would stop needing your neighbours’ permission. A cross lease usually says you cannot alter or add to your building without the written consent of the other owners. That includes a deck, a fence, a shed, and certainly a rebuild. With a freehold, the council is the only one you have to satisfy.

What a cross lease means in practice covers how far that consent requirement goes.

And cross-lease properties generally sell for less than similar freehold properties in the same place. So the thing making the house cheaper for you today is the same thing that makes it harder to sell later.

Both are good reasons to put up with everything below.

What the job actually is

Splitting one section into separate pieces of land is a subdivision. The council has to allow it. Then a surveyor draws up a plan, and Land Information New Zealand has to accept that plan and lodge it.¹

So this is not a lawyer’s job with some paperwork on the end. It needs a surveyor, and usually a planner as well.

And because the land belongs to all of you rather than to any one of you, every owner has to sign up to it.³ That is the agreed route, and it is the only cheap one. One owner says no and it stops. They do not need a good reason, and they do not have to explain themselves.

If a neighbour will not agree

There is one thing left to try, and it is going to court.

You and your neighbours own that land together. Where people own property together and cannot agree, one of them can ask a court to divide it up.² That includes splitting the land itself, which is what a conversion does.

The court then asks who would be worse off. You keep a share of a section instead of your own piece of land. Your neighbours face a subdivision they never wanted, and a bill for their share of it. The court also weighs how much of the place each of you owns, and what each of you has spent on it over the years.²

An example: twelve years to get there

Mr and Mrs Turner bought their flat in 2012, meaning to knock it down and build something newer.

Four flats sat on that section, owned between three parties. The Turners had one. The Wardlaws had one. The Goldsburys had the other two.⁴

The house was in poor condition, and flood risk meant the new floor had to sit higher than the old one. The Wardlaws agreed to the plans. The Goldsburys did not.

They said the Turners should be maintaining the house rather than replacing it, and that anything new had to keep much the same footprint and roof height.

Twice the Turners went to arbitration, and twice they lost. They redrew the plans smaller and asked again. Relations got so bad that they could not deal with the Goldsburys at all.

So they asked the High Court to split the property up. It heard the case and ruled against them, finding that the interests of justice did not favour splitting it.

The Court of Appeal disagreed, in 2024. It held that the cross lease’s own way of settling arguments had failed. The owners, it said, were “locked into an ownership position which they cannot resolve because of the positions they have taken.” A split was the “most just and practical way through the impasse.”⁴

Even that was not the end. The court sent the case back to the High Court to settle the terms, including who pays for the subdivision consent.

So a court is a way around a neighbour, but never an easy one. It took the Turners twelve years, two arbitrations and two courts, and they were paying a lawyer throughout. Do not buy a cross-lease house on the assumption that it will work.

The pipes and the driveway

Start by finding out whether this applies to you at all. Some flats already have their own drain, their own water connection and their own power, and their own way in off the street. If yours do, there is nothing to sort out here and this part costs you nothing. Your lawyer can tell you from the title and the council records.

Where the flats do share, you have to deal with each shared thing, and there are only two ways to do it.

One is an easement, a right for someone else to use part of your land for something specific, like a shared driveway or a drain. It stays with the land when the property is sold. The drain stays where it is, and the right to have it there goes on both titles.

The other is to move it, so each flat has its own connection. That is the expensive one, because it means digging.

You do not choose between them. The council does, as a condition of letting the subdivision go ahead. It can also strike off old rights that nobody needs any more. The new titles do not come out until the council signs off its conditions.¹

Where the services are shared, this is often what decides the price of the whole job. It depends on what runs where under the ground, and on where the new boundaries would fall. You cannot see any of that from the footpath, which is why a figure from the job next door is not a figure for this one.

Nobody official will tell you the cost

There is no government price list for this. The figures you will find online come from surveyors, planners and law firms who do this work, and they are quoting their own jobs rather than yours.

The cost also changes from section to section. The council fee, the survey, and whether the drains or the driveway need sorting out first all depend on the particular property.

So if the conversion is part of why you want the house, get a written quote from a surveyor first. Ask them to cover the survey, the council application and the work on the services. Get it before you sign the contract, not after.

What this means if you are looking at one now

You are buying the cross lease you can see today. You are not buying the freehold you might get in a few years.

If the house only looks like good value as freehold, then the price you are about to pay rests on a conversion nobody has agreed to yet.

Ask the agent whether the owners have ever talked about it. Ask your lawyer what a conversion would need from each of them. Asking costs you nothing, and the answers tell you whether this could really happen.

What to ask your lawyer

1. Have the other owners on this section ever talked about converting, and is there anything in writing?
2. If I wanted to do this later, what would I need from each of the other owners?
3. Are the drains, water and power to this flat separate from the neighbours', or shared?

Say these as they are written. They are normal questions to ask.

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