This article provides general advice on cross leases. For specific legal guidance, especially if you’re considering purchasing a cross lease or facing an issue with your cross lease, please contact us.

What is a Cross Lease Title?

A cross lease title combines an undivided share in the underlying fee simple (or ‘freehold’ title) with a leasehold interest in the flat (and sometimes a garage) built on that land. Cross leases are often viewed as inferior to fee simple titles.

In a cross lease arrangement, each flat owner holds a share of the fee simple title (e.g., a half share for two flats, one-third for three flats). All the owners then lease back their respective flats (and garages, if applicable).

Typically, a single “composite” cross lease title is issued, covering both the leasehold and the underlying fee simple title. However, separate fee simple and leasehold titles can also exist.

The Cross Lease Flats Plan (“the Flats Plan”) outlines each flat and garage. Some newer or revised cross leases include outdoor exclusive use areas.

Common Problems with Cross Lease Titles

– Alterations: Adding rooms, like conservatories, can alter the flat’s dimensions, creating discrepancies with the Flats Plan. Ensuring the plan matches the actual on-site structures is crucial. Differences may indicate a title defect.

– Outdoor Areas: Without designated outdoor exclusive use areas, all outdoor spaces are considered common use, even if fenced off. It’s preferable for cross leases to include outdoor exclusive use areas, requiring amendments to the Flats Plan.

– Consent for Additions: Cross lease owners need consent from lessee/lessor neighbors for additions, separate from local council building consent. Without neighbor consent, additions may breach the cross lease, and Flats Plan revisions might be necessary.

Key Terms in a Cross Lease Document

The cross lease document specifies the terms of flat occupancy. While terms can vary, common clauses include:

– Residential Use Only: The property is restricted to residential purposes.

– Pets: Keeping pets like cats, dogs, or birds that interfere with neighbors’ quiet enjoyment is prohibited.

– Structural Changes: Structural alterations or new structures require consent from neighboring flat owners, which cannot be unreasonably withheld.

– Inspection Rights: Neighbors or their representatives can inspect each other’s flats at reasonable times.

– Maintenance Obligations: Owners must maintain their flats’ interiors and exteriors, including fences, gardens, lawns, and hedges, in a neat condition.

– Tenant Compliance: Tenants must agree not to breach the lease terms.

– Exterior Color Scheme: Owners must agree on any exterior color changes.

– Shared Costs: Owners share costs for areas not separately leased, such as common driveways.

Seek Legal Advice

Understanding the specific terms and obligations of a cross lease is crucial. Always seek independent legal advice before entering into or modifying a cross lease agreement. Leading law firms offer fixed-price initial consultations to help you quickly understand your options. Contact us for professional guidance on your cross lease concerns.