All your Frequently Asked Questions answered

A. No. Both owners must consent to and participate in the conversion process.

Most of our conversions take about six months depending on council processing time which can be variable. It is possible to expediate the process, but this would require both party’s close participation.

A. There is no practical difference but ‘fee simple’ is the correct definition for the new title. Freehold is often confused with a property that has no debt.

A. Our fee is payable in equal monthly progress claims, the first being a deposit before work on site commences. We are flexible with payment so talk to us about a plan that works for you.

A. A cross-lease title states that each registered proprietor has a ½ share in the ‘underlying’ fee simple however this is a hypothetical share crystallised on expiry of the 999-year lease, in the meantime each party has use of an exclusive area and shared use of common area. We never see a 50/50 area allocation after subdivision and often the new lot areas are materially different. Most clients understand the ‘uneven’ legal ownership of the land they occupy.

A. The conversion is a ‘soft’ subdivision consent and council no longer requires the existing services to be upgraded if they are ‘fit for purpose’. We need demonstrate the dwellings where legally established in the era they were built; we do this by tabling building or resource consent. Council can not apply new district plan rules and engineering standards, but the existing services must be reasonable. The art of a successful conversion is minimising and managing the conditions of the subdivision consent. We generally do not have any conversions that require the private drainage to be separated or upgraded as this would be a last resort. We do recommend that private drainage be redirected if it interferes with future development or subdivision potential.

A. Each new lot requires a wastewater, stormwater, power, water and a telecoms connection or access to that connection protected by a legal mechanism (an easement). The art is the configuration of the easement to protect services and provide access to minimise any physical works or alterations to existing services.

A. No. We have been asked by council to have our engineer certify that a driveway is “fit for purpose” but this is rare.

A. We exactly follow the covenant, or notional (cross lease) boundaries defined on the flats plan by position, dimension, fence line or physical feature and convert these into legal boundaries defined by bearing and distance. We would only change this approach if requested by the parties or there was an obvious reason for doing so.

10. What is an easement and why are they required?

A. An easement provides a legal right for services to travel through or access over a neighbouring lot. They are always defined by an outline shape and denoted as a letter such as “A”. The easements are clearly defined on the Subdivision (or Scheme) Plan in the table of Memorandum of Easements where each is described, and the underlying land identified as “burdened” or “benefited”.

A. This is prepared by our contractor with a small push camera which logs drainage pipe positions and depths which are recorded by blue (stormwater) and red (wastewater) paint marks on the ground. Our survey team picks up these marks when we do the topographical or features survey. We are required to submit the CCTV Report to council and repair any broken pipes.

A. No. The conversion is a subdivision consent application for a ‘controlled’ activity. Council must give consent for a controlled activity, but it can attach conditions for servicing. We have had applications wrongly deemed by council as ‘discretionary activities’ for being in a special character overlay area but we have succeeded in obtaining consent and new titles for those few cases.

A. There are four ways: firstly, all the common area is attached to the rear lot with access over it granted to the front lot, secondly the area is halved with reciprocal access rights, thirdly all the area is attached to the front lot with access granted to the rear lot, and lastly, we create an ‘access lot’ owned equally by the other lots. We try and use the common area to make the division of the property as fair as possible.

A. Both the conversion to fee simple and remedying a defective flats plan (and cross lease title) are the same subdivision consent process through council however the conversion must include an analysis of wastewater, stormwater, power, water supply and telecoms for each new lot. The remedy process is about the same time frame and costs about 2/3 of the cost of a conversion.

A. We always recommend neighbours pay half of the cost each. In half of our conversions our clients pay an equal share of the cost, in the other half one party pays the whole cost. This imbalance is usually justified by one party having a defective cross lease or by a windfall benefit to one party such as the creation of a development site or simple economic reality.

A. Yes. Finance is becoming more commonplace when start to finish services like we offer are utilised. Please ask us about our finance options.

A. No. In most cases our lawyers undertake all the legal and conveyancing services for both parties. If your lawyer is involved, it is usually at the end of the process to gain your mortgagee’s consent and loan re-documentation.

A. The legal and conveyancing services to deliver the new fee simple titles are included in our fee. If you don’t have a mortgage, there are no further legal costs. If you have a mortgage, we need their consent and there is usually a modest cost for re-documenting your loan and mortgage due to the change of title.

A. Yes. This is the normal procedure and both parties must sign a waiver of independent legal advice at the same time as the AML due diligence.

20. Will my bank agreed to the conversion to fee simple?

A. There is general acceptance that a fee simple title has more value than a cross lease title therefore a bank’s security value is undiminished, and consent is normally granted.

A. Under our New Zealand AML legislation, a lawyer or conveyancer and real estate agent is required to identify any new client by photo ID and proof of address.

A. Our CCTV contractor is the first on site for half a day, then our survey team for a day, our engineer visits, and our survey team for a further half day. There may be a site inspection by a council officer, but this is unlikely. All need access to the exterior of the properties but not the interior unless there is an intertenancy fire wall.

A. The subdivision consent conditions define what needs to be completed, on and off site, before the conversion or subdivision is complete, and the completion certificate (s.224c) issued by council. This certificate is notoriously difficult to obtain if the conditions are not exactly met. We specialise in minimising conditions and ensuring they are mutually agreed with council and concisely worded so when we must supply documentation to council, we know precisely what will satisfy council.

A. Yes. As part of the conversion, we surrender any instrument that relates to the lease resulting in a ‘clean’ title. Other instruments must remain for example mortgages and covenants. It is possible to remove other instruments if consent is obtained from the other party to the instrument. We have successfully removed road widening instruments and suchlike.

A. Yes. The cross-lease property can be sold subject to the new fee simple title issuing. The property should not be marketed before the subdivision plan is finalised and preferably with subdivision consent both included in the sale agreement. The advantage being the property can be marketed as a ‘freehold or fee simple’ estate.

A. A type of ‘access’ easement. The owner of the ROW easement has a right to pass over the underlying land in perpetuity.

A. A flats plan must describe the exact outline of the structures or dwellings on it, if any alteration has been made to this outline the titles are defective and require remedy by re-issuing new titles, a process similar to the conversion process.