Understanding a cross lease can be reasonably technical and it’s important to take time to go through the details thoroughly and to seek advice if you’re not sure about anything.
Ownership of a cross-lease property means you own a share of the underlying land and lease flats (or houses) to yourself and other owners, usually for 999 years. A cross-lease plan is annexed to the certificate of title and is commonly referred to as the ‘Flats Plan’. This shows common areas and restricted areas, and delineates the area of each flat (or house).
The common areas, for example a driveway, may be used by all owners by virtue of their joint ownership of the land (if marked as a common area on their lease). There will be a covenant that the common area is not to be used for any purpose other than access for vehicles and pedestrians.
The restricted areas are intended to provide each owner with a private area for their use such as a courtyard or garden. The rights that the owner enjoys over the restricted area depend on the actual terms of the lease itself.
It is very important that a prospective purchaser search all the leases of the property in order to ascertain the full extent of all restricted areas.
The area of each flat should be clearly delineated on the plan. A prospective purchaser should take the opportunity to compare the Flats Plan with the actual buildings on the property to ensure that there have been no additions, alterations, or demolitions which are not shown or recorded on the Flats Plan. The alterations or additions may encroach either on to the common area or on to a restricted area and the owner has no leasehold title to them. This is in breach of the lease if consent is not sought and the Flats Plan is altered.
If you are purchasing a cross-leased property you can object to title if the Flats Plan is defective. You are able to object to title subsequent to signing an agreement for sale and purchase, provided you do so within the correct timeframe.
If alterations or additions have been made to the flats so the exterior dimensions have changed, the vendor will be unable to give you a leasehold title to the alterations/additions and the title is defective.
In summary, a cross-lease title should be checked carefully to ensure there are restricted areas and common areas, and that the Flats Plan is correct. If you want to purchase a cross-leased property and there is a problem with the Flats Plan, you may be able to have the vendor rectify the issue and then proceed accordingly.
If you are unsure of anything seek advice from your lawyer. We are also happy to provide advice.